A Federal Government decision to close the Christmas Island immigration detention centre by July 1 if the Coalition is re-elected has left residents feeling "used and abused", shire president Gordon Thomson says.

Key points: The PM said asylum seekers deemed a risk would be transferred to Christmas Island

The PM said asylum seekers deemed a risk would be transferred to Christmas Island But it revealed in the Budget that the centre would close by July 1

But it revealed in the Budget that the centre would close by July 1 Shire president Gordon Thomson says locals are sick of the politics

In February Prime Minister Scott Morrison announced the centre would reopen at a cost of $1.4 billion, in order to prevent refugees coming to the mainland, after Parliament passed laws allowing for the medical evacuation of refugees on Manus Island and Nauru.

A month ago he visited the external Australian territory — becoming the first sitting PM to do so — to announce that asylum seekers deemed a "risk" to Australia that were currently on Manus Island or Nauru would be transferred to the island's high-security North West Point facility.

But Tuesday's Budget papers showed the Government planned to close the Christmas Island Immigration Detention Centre by July 1 and return it to a "contingency setting".

The Christmas Island detention centre looks set to be closed again in the wake of the Budget. ( AAP: Lloyd Jones )

It has allocated $150 million this financial year and only $23 million in 2019-20 for regional processing on Christmas Island.

There is no additional funding allocated for future years.

Finance Minister Mathias Cormann said that was because the Coalition planned to repeal the medevac laws if it won the election.

He said doing so would allow the Government to again close the Christmas Island detention centre.

Island caught in the 'political game'

Mr Thomson told ABC Radio Perth that news of the closure brought a very quick end to the boom-bust cycle he said had plagued Christmas Island over the past two decades since the detention centre was built.

"It's just another chapter in the political game that, really, is not affected by anything we say or think, because we're not consulted about any of these things," he said.

"People feel quite abused and used, and this goes back a long time and the detention centre has been at the centre of all of this."

He said the centre's re-opening had brought a level of economic activity to the island which would now likely come to a jarring halt.

Christmas Island residents want their home to be known for tourism, not detention. ( Supplied: DIAC images )

"There have been some beneficiaries of the Government investment over the last month in re-opening the centre," he said.

"There's been an influx of employees from Serco onto the island, they're spending in the shops, and the rent-a-car people are doing OK, but they're going to be very disappointed when they read the budget papers this afternoon.

"Lots of work's been done, I think about 150 Serco guards have been brought in in the last month, and they're hard at work preparing the cells for prisoners — but there are no prisoners, and nobody knows if anybody is coming or not."

The Department of Home Affairs refused to say if any asylum seekers had been transferred to Christmas Island since the announcement it would be reopening.

"The Department will not comment on the number of medical transfers," a spokesperson said in a statement.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 2 minutes 11 seconds 2 m 11 s Josh Frydenberg forecasts the budget to return to surplus (Photo - ABC News: Marco Catalano)

Mr Thomson said the economic activity the detention centre brought to Christmas Island was too dependent on cyclical politics, and had severely damaged the island's potential as a tourism destination.

"It's been about vilifying people, it's been about vilifying refugees, it's drawn very negative attention to Christmas Island as a prison island rather than a tourist island, which is what everyone else on the island wants to see," Mr Thomson said.

"It has not been good for the people socially, morally or economically in the long term."