The recent spate of scandals surrounding Nauru’s offshore detention centre demonstrate just how much both the Nauruan and Australian governments have riding on the lack of scrutiny into its inner workings.

Footage of children with their lips crudely sewn together and eyewitness accounts of institutionalised sexual abuse have forced Immigration Minister Scott Morrison to announce an independent inquiry into the allegations — but not without first commenting on the possible motivation behind such reports.

The official terms of reference released by the Department of Immigration and Border Protection list the allegations as including:

“… claims of sexual and other physical assault of transferees, the orchestration and facilitation of transferees to engage in non-compliant or harmful behaviour and protest actions potentially endangering the safety and security of all persons at the centre, and the misuse and unauthorised disclosure of sensitive and confidential information, including to undermine the proper management of the centre”.

Tellingly, these terms reflect the same narrative that Morrison has been proclaiming since he first responded to the latest abuse allegations. The inquiry seems to be focusing not on any possible policy or practice that might have led to incidents of self-harm and protest, but on the implication that the alleged actions are the result of a carefully orchestrated, politically driven campaign to, in the minister’s own words, “undermine the government’s border protection policies”. Similarly, the allegations of sexual assault are buried amid suggestions that they have been fabricated by subversive elements within the facility peddling their own agenda.

In his statement announcing the inquiry, Morrison accused staff working within the centre of intentionally sabotaging the work of Operation Sovereign Borders.

“They are employed to do a job,” he said, “not to be political activists.”

Ten staff from Save the Children, an aid and development agency aimed at protecting vulnerable children, were removed from the island following the allegations. Morrison has stressed that these expulsions do not relate in any way to the charges of sexual abuse, suggesting that these workers are the ones the minister has accused of making “tactical use of children” — allegations the organisation has vehemently denied.

Save the Children chief executive Paul Ronalds told media that the self-harm incidents were not the result of coaching but had been triggered by the government’s recent announcement that reintroduced temporary protection visas would not be available for detainees in the Nauru processing centre.

“We reject in the strongest possible terms these allegations that our staff have in any way fabricated stories of abuse or in any way encouraged self-harm,” Ronalds said.

Nauru has also been rocked by the revelation last month that Westpac was to freeze the republic’s bank accounts for failing to pay over $30 million it owes in debt to United States-based fund manager Firebird.

The debt has snowballed from the initial $16 million asked of the government two years ago, of which Nauru has not paid a cent.

In an affidavit to the NSW Supreme Court, Nauru’s finance minister David Adeang revealed that without access to the money the government would be unable to provide even the most basic of services to its people, including paying the salaries of its employees — almost half the working population of the small republic.

Adeang also stated that planes would be unable to fly to and from Nauru, depriving those in the detention centre of access to health professionals and other support staff.

The detention centre holds close to 1200 people waiting to be processed, including almost 200 children as of April this year — a worrying number for an island with a population of only 10,000.

Ultimately, the court determined that Nauru was immune to the 2012 judgment under section 9 of the Immunity Act — as a foreign state, it doesn’t fall within the jurisdiction of Australian courts. Although the bank accounts are expected to be released within the week, this ruling is only a stay of execution for the island republic — it will still have to pay Firebird what it owes.

It’s money the island nation just doesn’t have to spare. Since the decline of its lucrative phosphate mining industry in the 1990s, Nauru has relied mainly on aid programs from other countries to keep its economy afloat — primarily from Australia.

Australia is set to give over $27 million in aid to Nauru in 2014-15, a drastic increase from the $23 million delivered back in 2009-10, before the detention facilities were reopened. The degree to which the Nauruan economy is supported by ours is staggering; Australian bilateral funding made up more than 45% of the island nation’s overall health budget in 2012-13.

Although helped by the reopening of the Offshore Processing Facility in 2012 under the Gillard government, Nauru’s unemployment rate remains high at 25%. Nauru has been without commercial banking services since the Bank of Nauru collapsed in the early 2000s, forcing it to rely on Australian institutions. The political system lacks formal political parties, with the country’s parliament comprising 19 seats held by independent politicians. This has led to a deeply unstable political landscape — continued Australian aid is one of the few things to achieve bipartisan support. Without our increased aid, and without the income generated by the detention centre, Nauru’s economic future looks grim.

Whether this support will continue as the refugees are steadily relocated to Cambodia is still unclear — as are any details about how relocation will work. While Morrison has emphasised that the resettlement would be strictly voluntary, Refugee Council CEO Paul Power has accused the government of failing to give people in Nauru’s detention centre a real choice in the matter. “We can already see that Australian politicians are getting ready to criticise refugees who are reluctant to accept the offer of resettle from Nauru to Cambodia,” he said.

“The implication being that, if people need protection from persecution, they should accept any offer available, even ones which are not viable.”

The future of Nauru after Australia has lost a use for it is not something the Australian government seems willing to talk about. But the island republic, still struggling to rebuild its economy in a world that no longer needs what it has to sell, can’t afford for Australia to take too long.