Scott Morrison is banking a saving of more than $1b based on plans to win the next election and shut down an immigration detention centre on Christmas Island.
Scott Morrison will save $1 billion shutting down the Christmas Island immigration detention if he wins the May election, despite only reopening it months ago.
The prime minister promised to spend $1.4 billion reopening the mothballed facility after laws passed federal parliament against his will, making it easier for sick refugees to seek medical transfers.
However, this price tag has been slashed to just $185.2 million in Tuesday's federal budget.
Finance Minister Mathias Cormann said the coalition was counting on winning the election and shutting the centre to save $1.2 billion.
"Should we be successful we will reverse that legislation, which means we will be able to close Christmas Island again, as we have closed Christmas Island before," Senator Cormann told reporters in Canberra on Tuesday.
The sizeable reduction in spending will depend on the coalition government winning the upcoming election, convincing parliament to repeal the medical evacuation laws, and closing Christmas Island by July 1.
The centre will then be returned to a so-called contingency setting, with the bulk of the budgeted money to be spent on sending any asylum seekers on Christmas Island back to Manus Island and Nauru.
Mr Morrison toured Christmas Island in February too announce it would reopen to handle medical transfers from detention centres on Manus Island and Nauru, and any future asylum-seeker boat arrivals.