Treasurer Josh Frydenberg says repealing the so-called "medevac" laws and closing the Christmas Island detention centre remains a priority.
But he insists there is money in the budget to keep the centre running if the Senate blocks the repeal.
"We have made allocations in the budget for the maintenance of Christmas Island. But let me just make it very clear, it is our policy to reverse that legislation," Mr Frydenberg told reporters in Canberra on Tuesday.
"We can only reverse the legislation if it passes both houses of parliament. So let's work that through when the parliament resumes."
Delaying the repeal of the medevac laws - which make it easier for sick refugees to seek medical transfers - could blow a billion-dollar hole in the budget.
Scott Morrison reopened Christmas Island at a cost of $1.4 billion in response to the laws, which were passed against the government's wishes.
The prime minister argued the centre would be necessary to deal with an influx of hundreds of refugees, although there has only been one confirmed transfer under the new system.
Mr Morrison said reopening the centre would also deter people smugglers considering testing Australia's resolve on border security.
He later downgraded the Christmas Island spending forecast to $185 million in the federal budget.
However, this saving is reliant on revoking the medevac laws and shutting the centre down by the end of June.
With counting still underway following the federal election, it's anticipated parliament will not return in time to meet the deadline.
Even if the government waits until the new Senate starts work in July, it will not be able to muster enough crossbench votes to unwind the medevac laws, with a pair of upper house independents against the idea.
The coalition has set aside $23.7 million in 2019-20 to wind the centre back to a "contingency setting", but there is no funding allocated for the three years after that.
Liberal senator Arthur Sinodinos said the timing of the medevac laws was "a matter for the prime minister to sort out".
"He's already identified doing issues on foreign fighters and some other matters which have to take priority," the senator told Sky News.
"But I assume the bill will still be on his radar as something to be repealed."
Senator Sinodinos said the coalition's re-election sent a clear message to people smugglers.
"There was talk before the election that people out there - people smugglers - were starting to think about testing the resolve of the new government," he said.
"That is now no longer an issue."
Iranian asylum seeker Behrouz Boochani, who is detained on Manus Island, claims nine men have tried to take their own lives in recent days.
"The situation in Manus is out of control," he tweeted.
Senator Sinodinos said the government would continue providing care to detainees on Manus Island and Nauru.
Australian Associated Press
