The latest report should be a warning sign for governments and businesses, Edelman Australia chief executive Tom Robinson said.
"What we've seen over time is a greater belief that government, business and media leaders are purposefully trying to mislead or lie to us," he told AAP.
"More than one in two (53 per cent) view hostile activism as an appropriate means of change in the 18 to 34 group and that's a really startling point of view which runs counter to what Australian values are."
Those respondents would approve of at least one of the following actions to bring about change, including attacking people online, intentionally spreading disinformation, threatening or committing violence or damaging public or private property.
The communication firm's report also found fear of discrimination had surged to a record high.
Nearly two-thirds of survey respondents worried about experiencing prejudice, discrimination or racism - up 10 points in the last year with significant increases across countries and demographics.
In Australia, women over 55 are the demographic that most fear discrimination.
"We don't know for certain what the specific reasons are behind that surge," Mr Robinson said.
"What we do see more broadly is that there are communities that feel marginalised and left behind and they're often the ones that hold the least trust in institutions designed to support them."
Another surprising finding was the lack of optimism for future generations from respondents in Australia.
Only 17 per cent of Australians believe that the next generation will be better off compared to today.
"Australians are simply not feeling optimistic about our future prosperity and this lack of hope is one of the key factors driving a sense of grievance," Mr Robinson said.
Across developed countries, just one in five see a better future.
"We have big swathes of our communities who don't feel like they're being heard and who feel like they're being left behind," Mr Robinson said.
"Anything that the government does is inherently distrusted and believed to favour government over the people who vote them in."