This paper first reviews the evolution of refugee policy from 1973 to 2007. In the 1970s, Australia abolished the “white Australia policy” and began to make new refugee policies in response to the refugee crisis after the Vietnam War. Since then, four administrations, from Fraser to Howard (1975-2007), had adopted strict border control. Notably, the “offshore processing” policy of the Howard government had achieved remarkable results but been blamed for lack of humanitarianism. Kevin Rudd then abolished the policy, but Julia Gillard returned to the increasingly strict refugee asylum policy. The article argues that the refugee policy reform of the Gillard government has its domestic and global background. Secondly, the reform process of Gillard's refugee policy is divided into four stages. Gillard tried to avoid Nauru and PNG for political considerations and pursued reform in the compromise between humanitarianism and national interests. However, she had to restart the “offshore processing” policy after setbacks in the domestic game. Finally, Gillard and the successive administrations formed a consensus on tough refugee policy, and the policy of two parties gradually witnessed a convergence. Faced with the dilemma to choose between humanitarianism and national interests, Australia finally decided on national interests as the priority.