The Federal Indigenous Affairs Minister’s plans to shut down an Aboriginal camp in Western Australia has drawn criticism from community groups despite its poor conditions.

Senator Nigel Scullion recently told the Western Australian City of Kalgoorlie to "immediately close" the campsite, originally formed in the1990s, to temporarily house people visiting from remote communities.

Federal Government provided $100,000 to the local council in 2011  to upgrade the facilities at Boulder Camp which have long suffered from overcrowding and a lack of amenities.

Doubt was cast over its future when the city of Kalgoorlie-Boulder last year said it was no longer appropriate for it to manage the facility.

Mr Scullion says it was understood that the camp would be closed after a new short-stay accommodation facility was opened two years ago.

The camp mainly provides for travellers from the remote community of Tjuntjuntjara, 650 kilometres east of Kalgoorlie-Boulder.

Paupiyala Tjarutja Aboriginal Corporation  general manager Fiona Pemberton said she was "perplexed" by the Minister's "top-down approach to community problem-solving".

She says the Minister has demonstrated a poor understanding of the landscape and issues common to Boulder Camp," she said.

Ms Pemberton says closing the camp won’t solve the problems, it will just shift them elsewhere.