Spending needs a touch of social responsibility in these troubled times
Governments and corporate chiefs need to ditch extravagance
Covid-19 fears put many of us on the back foot. The moot question that baffles us is how to tackle its spiralling effect.
Among the many elements is how to manage the financial aspect. I assume that austerity is one word that will be the order of the day ... and the way forward. Governments have to lead by mending spending behaviours. Businesses will have to contain their expenses to reduce the impact on financials, with most enterprises already making such moves.
The same is true for individuals whereby they will purge all expenses other than for fundamental needs to secure their financial security.
Cut wasteful spending
Governments need to pivot towards spending on initiatives to boost demand rather than any indulgence in non-developmental activity. It would need political resolve to cut all such expenses.
Cutting excess expenditure, winning on efficiencies, and use of stimulus in an appropriate way will be a necessity for balanced growth as well as a measure of reassurance to people.
Corporates need to move into a culture where need-based spending rules have to be adhered. CEOs have got to mend their lifestyles featuring corporate jets, lavish parties and posh offices and instead aim for realistic pay packages. As per estimates of the top S&P 500 companies, between 2017-19, corporate lifestyle spend had gone way beyond acceptable norms.
Corporate excesses
Costs related to corporate jet use climbed to 11 per cent in just one year, according to figures from compensation research firm Equilar Inc.
With individuals, private spending has to be tamed to the basic. It is not as a way to check compulsive behaviours but as a way towards responsible social spending.
It will be a painful journey, but I believe this will help eventually.
Governments, businesses and individuals must adhere to austerity, not just a shortor medium-term exercise, but embed this as a long-haul discipline. Both business and the individual need to tweak spending. It also offers a window of opportunity for the social order to adapt to new ways of being socially responsible.
We need to regimentalise this as a way of life.
While few may argue spending is the way to boost consumer demand and the economy, this should not mean we direct our expenditure towards nondevelopmental needs.
Rather than take measures that are counterproductive to growth, public and private sector leaders should direct all efforts to boost public confidence.