The AMA, along with the Scrap the Cap Alliance, has been lobbying hard to get the proposed cap abolished since former Treasurer Wayne Swan announced the reform in April.
Dr Steve Hambleton, AMA President, said in a recent statement the cap was a tax on learning that would have discouraged investment in skills and stifled excellence, and the government's decision to scrap it was recognition of the importance of ongoing professional education.
"The coalition government has clearly listened to our concerns," Dr Hambleton said.
"The proposed cap was a poor policy that would have undermined medical education and training and made it increasingly difficult for doctors to provide quality health care."
Dr Hambleton said rural doctors and doctors in training would have been hit particularly hard by the proposed cap, which would have made it much harder for them to develop and maintain their skills.
"Quality medical education is expensive, and the proposed cap defied the reality faced by doctors wanting to improve and broaden their skills," he said.
"We asked the government to scrap the cap and they have delivered.
"The decision to scrap the cap will ensure that Australian communities continue to receive world-best practice in the quality of care they receive."
Opposition to the cap was substantial, with many of Australia's peak professional organisations joining the Alliance to fight the imposition of the new tax on learning.
The AMA was a founding member of the Scrap the Cap Alliance, which has more than 70 member organisations covering more than 1.6 million professionals including universities, nurses, engineers, accountants, lawyers, veterinarians, allied health professionals and small business operators.
