The federal government-appointed resident administrator of the Indian Ocean territories says the islanders are being denied the full democratic rights enjoyed by their fellow Australians.
The Christmas and Cocos Islands are both territories of Australia.
At federal elections, islanders vote in the electorate of Lingiari, one of the two Northern Territory electorates, which stretches as far as Alice Springs.
The islanders also have local council elections, but there's no third or middle layer of government.
Instead, the federal Department of Infrasctructure and Regional Development is responsible for delivering services that most Australians have provided by state governments - like schools, hospitals, roads, water and emergency services.
But the federal government doesn't deliver those services directly.
It pays the West Australian government to deliver the services on a contract-basis on the Commonwealth's behalf.
The islands' administrator Jon Stanhope says these arrangements mean locals are deprived of democratic rights.
"The fundamental issue in terms of governance of democracy are our rights to hold accountable elected officers, namely politicians, for the quality and nature of services that are delivered and that doesn't happen here," Mr Stanhope said.
"Western Australian public servants delivering services under contract to another government are not accountable directly to the people of Christmas or Cocos Islands."
Christmas Island lies almost 2,700 kilometres north-west of Perth, but only 320-kilometres south of the island of Java in Indonesia.
It wasn't until 1958 that Britain transferred sovereignty over Christmas Island to Australia.
The Cocos Islands are 850-kilometres west of Christmas Island and became an Australian territory in 1955, having previously been admistered as a dependency of Britain's Singapore colony.
Jon Stanhope says governance arrangements haven't evolved since the 1950s to give residents full democratic rights.
"The people of Christmas and Cocos Islands, they aren't consulted, they don't get to vote, they have no say in the delivery of policy or the nature or content of services that are delivered. I think it's an anachronism and I think it would take most Australians by surprise to know there are two-and-a-half-thousand Australians who can't applaud Australia for its commitment to democracy insofar as it affects them."
Local businessman John McDonald says the interests of Christmas Islanders are being overlooked as their island is used to help solve the problem of asylum seeker boat arrivals.
A housing shortage, exacerbated by the influx of Immigration Department workers, means now some locals are paying as much as a-thousand dollars rent a week.
Mr McDonald says cost-of-living is estimated at about 180 per cent above that on the mainland, with an iceberg lettuce at the local store costing as much as 12-dollars.
He says many locals feel used and disempowered.
"At the moment we are being dumped on quite severely, apparently from my understanding that the people who they can't handle in the other detention centres are winding up back here. That place takes priority over us locals. We now look upon ourselves as second or third class citizens on our own island. All of the decisions that are made on the island regarding major infrastructure and all that sort of stuff, we actually don't get any imput into at all. There's no local consultation between the government and the locals. There's no polls called for. Even the local shire doesn't get much of a say, or any say really, in what is happening on the island. We get informed, we don't get any input into."
About 70 per cent of the Christmas Island's population is of Asian heritage, mostly Chinese, with the remaining population predominantly European or Malay in origin.
Alfred Chong is a member of the island's Chinese community.
He says to report a problem, locals can go to the island administrator, or write to the federal minister or the federal department.
Concerns are then forwarded to the relevant WA authority which investigates before passing a response back up the line.
Mr Chong says while most people agree the governance situation creates significant problems, they often can't agree on a solution.
"With this sort of disunity it's a bit hard to project a similar vision, a united front, to approach the government to do anything. So it's very easy for the government in fact not to do anything because the voice from the island, locals themselves, is not very clear. These multi-layers of bureaucracy in fact helps the bureaucracy to simply say no to everything. It doesn't have to do anything it just sits there and nothing gets done on Christmas Island as a result."
A Howard government-era federal parliamentary committee suggested three possible changes to the administrative arrangements for Christmas and Cocos Islands.
These included making the territories part of Western Australia, or giving them a limited form of self-government.
But so far, neither Labor nor Coalition governments have acted on the recommendations.
