Christmas Island, as an Australian territory, is governed under the legal and administrative framework of the Australian government. The island's economy relies primarily on three sectors: phosphate mining, tourism, and government services.

Phosphate mining, historically a significant industry on Christmas Island, has played a crucial role in the economy. However, in recent years, mining operations have decreased due to declining phosphate reserves. Tourism has emerged as a growing sector, attracting visitors with its natural beauty and unique wildlife. The island's diverse ecosystems, national parks, and stunning coastal landscapes make it an appealing destination for nature enthusiasts and adventure seekers.

The Australian government provides essential services and infrastructure on the island, including healthcare, education, and public administration. The government's presence is significant due to its responsibility for the island's governance and the welfare of its residents.

The remote location of Christmas Island poses challenges for economic development. However, efforts are being made to diversify the economy by promoting sustainable tourism, encouraging small businesses, and exploring other potential industries such as aquaculture and agriculture.

The government of Australia, through the Department of Infrastructure, Transport, Regional Development, and Communications, oversees the administration and governance of Christmas Island, ensuring the provision of services and the overall well-being of the local population.