Why Voters Left the [US] Dems in 1994- by Nathan Newman:

But the other part of the story is why poorer voters not interested in the Christian Right agenda did not turn-out and why even religious voters were more interested in voting on cultural issues than on their economic self-interest. The answer is that Clinton's failure to deliver on health care and a real improvement in the economy for such lower-paid workers disillusioned them. The Democrats demonstrated how limited their party is in delivering benefits to working Americans, so they saw little difference in the parties and voted on cultural divisions rather than
economic divisions.

Interestingly, richer Americans decided the same thing and many more upper-middle class Americans decided the same thing and voted more Democratic than they had under Reagan--probably inspired by opposition to the religious conservatives.

Without a strong economic message for working Americans, voters turn to cultural issues to define their politics. And in an economy that is destroying the standard of living of most Americans, cultural politics becomes more and more racist and xenophobic.

If the Democrats or any progressive party is to have a chance of regaining the allegiance of the population, we need to develop a credible economic message that addresses the needs of working and poor Americans. Otherwise, we seemed doomed to a conservative and increasingly xenophobic politics.

It's a truism that you can't translate research between countries without a few caveats. Australia really has no religious right of significance. The US has not experienced the Hanson phenomenon which allows marginalised voters to vote their cultural message while yelling: 'A plague on both your houses'. Nevertheless, there is a serious message for Labor. Their economic message is just not strong enough for them to be able withstand Hansonism.

The really interesting question is why Labor holds every state and territory government. Partly it's because state politics are inherently economic and lack the cultural issues like Tampa or terrorism. If it's also because Labor is doing better on economics at the state level than the federal party needs to rethink what it's about.