When the Menzies government took power in December 1949 the way seemed clear for a swift settlement with the BMA. The fragile unity of the medical profession had been sustained by the High Court challenge and then the imminence of federal elections, but its membership was increasingly anxious for a workable scheme of subsidized private practice. The appointment of the veteran Country Party MP, Sir Earle Page, a surgeon and longtime member of the BMA, as Minister for Health seemed to augur well. This period of goodwill on both sides offered the new government an unparalleled chance to achieve a settlement, but only if planning did not again become mired in endless negotiations and another fruitless war of attrition.

The coalition's health policies of 1949 were a confused attempt to extricate the Commonwealth government from the impasse of the previous five years. They were presented as part of a wider project to free the people from the restraints of socialism – relying on individual intitiative and the market rather than the dead hand of bureaucracy – a programme forged by the policy advisers of the Institute of Public Affairs in the blackest days of Australian conservatism.

The new government promised a system based on voluntary insurance, what the Country Party leader and Treasurer Arthur Fadden termed 'the Christian idea of mutual assistance', on similar lines to the BMAs A National Health Service of 1949.