New analysis from KPMG shows Australia's average household wealth jumped 24% in a single year, from $1.26 million to $1.56 million. Read that again slowly, because the median household wealth barely moved. In fact it dropped, from $701,000 to $700,000, over the same period.

That gap is the real story behind this year's budget and the wave of new taxes that came with it. It's also why so many Australians are quietly asking a question that would have sounded extreme a few years ago: is this country turning socialist?

The Millstones of Taxation and Inflation

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation." - quote widely attributed to Vladimir Lenin

There's a quote commonly attributed to Vladimir Lenin that's been doing the rounds again lately. The idea behind it is simple and brutal: crush the middle class by grinding them between the millstones of taxation and inflation. Use two forms of government pressure at once so people don't notice they're being squeezed from both sides.

I'm not interested in relitigating who actually said it. What I am interested in is how accurately it describes what's happening here. Australia already has more than 125 different taxes across federal, state and local government. Nobody, including most accountants, could tell you exactly how many of those apply to any one household at any given time. And the pattern is always the same: new taxes get added, old ones never seem to disappear.

Look at the last five years. Victoria has pushed through significant land tax increases. Queensland introduced a view tax on apartments. Tobacco taxes have climbed so high that the black market has effectively taken over that entire category. Now it's capital gains, negative gearing and anything else attached to property or small business ownership.

This isn't tax reform. It's a slow, steady tightening on the people who own modest assets, run small businesses or are trying to build something for their family. It's happening during the highest inflation the West has seen in decades, which is exactly the combination that quote warns about.

Why the Middle Class, Not the Wealthy

Here's what doesn't add up if the goal is genuinely to tax the wealthy. If governments wanted billionaires to pay more, they'd be closing offshore tax havens. Instead, the legislation keeps landing on negative gearing, capital gains and the kind of assets an average small business owner or landlord holds, not the structures the ultra wealthy actually use to shelter their money.

The timing makes it worse. Programs were introduced allowing single mothers to buy a home with a 2% deposit, right before negative gearing changes came in and Sydney house prices reportedly dropped 7% in 90 days. That sequence put some of the most financially vulnerable people into the market with maximum leverage, just before the settings changed underneath them.

This is worth sitting with, because it points to something bigger than any one policy. Socialism, in practice, doesn't remove the upper class and the lower class and leave everyone equal. It removes the middle. What's left is concentrated wealth and power at the top, and a much larger group with very little at the bottom. Nothing in between.

What the KPMG Numbers Actually Show

This is where the data gets genuinely interesting. KPMG urban economist Terry Rawnsley found that the number of households sitting in the $300,000 to $900,000 net wealth bracket, historically Australia's middle wealth band, has fallen to under 28% of all households, down from 34% just a decade ago.

That bracket used to be topped up by first home buyers entering the market with a deposit of around $200,000. As housing affordability has deteriorated, fewer people can get in, and the bracket keeps shrinking. Meanwhile, the wealth of Australia's richest households is growing at a pace that pulls the national average well above where the typical household actually sits.

Rawnsley put it plainly: Australia is at risk of becoming a country where the wealth of your parents matters more to your financial future than how hard you work. That's not a political statement. That's what the data is showing. And it's about as clear a description of declining social mobility as you'll find in an economic report.

Protecting Yourself From the Squeeze

I started Liberty Bullion because I believe gold, silver and platinum are going to be one of the strongest places to hold wealth over the next five to ten years, and because I think the middle class has been left out of that conversation for too long. The wealthy have held physical precious metals for generations. They've had it stacked away in vaults while everyone else kept their savings in the bank and maybe a property, with no exposure to metals at all.

I'm not telling anyone what to do with their money. What I can tell you is what I'm doing with mine, and why. When taxation and inflation are both moving against you at the same time, the assets that sit outside that system, the ones without counterparty risk, start to matter a lot more. That's the position I've taken, and it's the reason Liberty Bullion exists.

What a time to be alive.
Sam from Liberty Bullion