One area of policy difference between Kevin Rudd and Julia Gillard immediately raised after last night's leadership change is asylum seekers. After all, it's one of the biggest challenges in terms of policy and votes facing the Government, and Rudd famously declared he did not want to see the party 'lurch to the right' on the issue on the night he was deposed three years ago.

However, a left/right analysis of Rudd and Gillard's approach to the issue misleads far more than it reveals. Instead, there is a regional/domestic divide in their approach, and curiously enough, it's Gillard who is the regionalist.

Within two weeks of coming to power, Gillard declared in a speech to the Lowy Institute that she was working towards 'a regional approach to the processing of asylum seekers, with the involvement of the UNHCR, which effectively eliminates the on shore processing of unauthorised arrivals'. She also announced, pre-emptively it turned out, an agreement with East Timor to host a processing centre.

While that deal soon collapsed, Gillard's instincts continued to be regional. She and Chris Bowen put far more effort in to the Bali Process than Rudd had, and saw the (still weak) institution agree to a 'Regional Cooperation Framework', as suggested by the UNHCR. This included, for the first time, the discussion of a regional processing centre hosted in a Southeast Asian country. Gillard pursued a deal with Malaysia which was rightly criticised as too small and without sufficient protection of minority rights, but which could have been a framework for something sustainable in the longer term.

Of course, Gillard's plans were stymied by the High Court, the Coalition and the Greens, leading her to use domestic policy approaches and restore the Pacific Solution (the Manus Island and Nauru facilities are not 'regional' in any sense of significant cooperation; they are merely Australian-run detention and processing centres in locations outside Australia's legal framework).

Rudd, by comparison, tried to use domestic measures to address the issue. He argued for restoring morality to Australia's approach, and ended some of the Howard Government's restrictions and policies. However he slowly began rolling back some of his changes as the boats began arriving. Rudd even used a flat-out ban on processing arrivals from Sri Lanka and Afghanistan in a desperate bid to stop the flow. Like almost all other domestic measures we've tried, none of this really worked. Yet for all his talk about engagement and Asia as a 'third pillar' of his government's foreign policy, Kevin Rudd did not want to involve the region in solving Australia's asylum seeker problem. If the comments by Bob Carr last night are any indication, the second Rudd Government will also focus on domestic approaches.

To borrow a line from the former PM, this regional/domestic divide doesn't explain everything about Kevin Rudd and Julia Gillard's different approaches, but it does explain much of it.

There are two takeaways from this. One is that the story of how the Australian government has tried to solve the asylum seeker issue is far more complex and far more interesting than a simple left/right dichotomy. Gillard, like Howard before her, sought a regional approach. Rudd, like Keating before him, sought a domestic approach.

Which raises the second and perhaps unanswerable question: is there a link between the idealism which Rudd and Keating attach to concept of engagement and their unwillingness to pursue a regional approach on morally difficult issues like asylum seekers? In other words, is the idealistic conception of 'engagement' restricting actual engagement with Asia on issues that matter to Australians?