COVID-19 is the biggest global health challenge since the Spanish Flu.
The first priority for governments must be protecting the health and wellbeing of their citizens. But the extraordinary economic impact of COVID-19 is also demanding extraordinary actions. The global economy is contracting, and predictions of depression-level unemployment have resulted in unprecedented fiscal and monetary responses from governments and central banks around the world.
From wage subsidies across Europe, to an effective doubling of Newstart in Australia, policy proposals once thought unattainable are now being implemented almost overnight. And the scale of some measures are hard to fathom:
All evidence suggests these economic headwinds will be protracted. But with so much news every day, it’s easy to miss some of the most consequential announcements.
We’ll be providing daily updates as governments attempt to navigate their economies through the crisis. The timeline is focused on fiscal responses from Australia’s fellow OECD member nations.
Notable Milestone: Cases reach 500,000 globally.
- Canada expand upon initial stimulus, offering further support for small business. The new measures include Government-guaranteed, low interest loans to keep businesses afloat, and a 75 per cent wage subsidy for three months, retroactively applied to March 15. This brings Canada’s overall stimulus to US$73.6 billion.
- The United Kingdom announce a support package specifically for the self-employed, promising to pay the UK’s 5 million self-employed and freelance workers up to £2,500 per month during the crisis.
- India unveils its first stimulus package soon after it entered a nationwide lockdown. The package is focused on providing relief for millions through food security initiatives and direct cash payments to households. Cost: US$22.5 billion.
- Singapore extend existing stimulus efforts. The latest announcement focused on providing a 25 per cent wage subsidy, taking Singapore’s overall stimulus efforts to US$33.7b billion.
- The G20 meets for the first time via video link, issuing a communique stating nations will do ‘whatever it takes’ to combat the COVID-19 crisis and its economic fallout.
- The United States congress passes the largest stimulus bill in history. The package focuses on direct cash payments to workers and the unemployed, including up to $3000 for families, as well direct financial support to businesses and money for state-run health systems. Cost: US$2.2 trillion.
- Germany announces its first Federal Government stimulus, focused on providing direct financial support to small businesses, as well as unemployment benefits to freelancers, sole traders and the self-employed. Cost: 50 billion euros.
- Ireland expands its initial stimulus, increasing direct payments to laid off employees, and introducing a 70 per cent wage subsidy to avoid mass job losses. Cost: 4 billion euros.
- Australia announces a second tranche of stimulus measures. The package includes cash transfers to businesses of up to $100,000, an effective doubling of the JobSeeker payment or those out of work to $1100 per fortnight, as well as the introduction of a Coronavirus Supplement of $550 per fortnight for those who have seen a reduction in their income. Cost: AU$66.2 billion.
- Sweden announces a cash infusion into its arts and cultural sector, as well as the sports sector. Cost: AU$170 million.
- France announces two new initiatives. The first enables the French public investment bank Bpifrance to provide State guarantees on commercial loans and credit lines, respectively, for enterprises with up to 5,000 employees. The second is a scheme to provide State guarantees to banks on portfolios of new loans for all types of companies. This is direct aid to businesses that will enable banks to quickly provide liquidity to any company that needs it. Cost: 300 billion Euros.
- Japan considers a second stimulus, expected to include direct cash payments to citizens, as well as ‘gift certificates’ for closed businesses to help with their cash flow. Cost: US$270 billion.
- Russia announces an ‘anti-crisis fund’ to shield its economy from the downturn. The fund will be focused on stabilising Russia’s financial system, which has been severely impacted by the collapse in oil prices. Cost: US$4 billion.
- Australia’s Reserve Bank announces a quantitative easing program, and reduces interest rates to 0.25 per cent.
- The European Union’s Central Bank announces a Pandemic Emergency Purchase Program. The plan is designed to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the outbreak and escalating diffusion of the coronavirus. Cost: 750 billion euros.
- China considers a US$395 billion central government investment in infrastructure spending, and removes growth targets.
- Canada announce a multifaceted stimulus and support package, which includes direct income supportt for those out of work, a work sharing arrangement, delaying tax collection, and direct support for businesses in financial hardship. The Government also announced it would implement a temporary wage subsidy of 10% of a workers wages for the next three months to help mitigate against job losses. The package was among the most detailed and comprehensive announced, with specific measures for individual facilities and institutions, such as childcare centers, and shelters for those escaping domestic violence. Cost: US$19.5 billion.
- New Zealand announces a support package, providing subsidies for small business, special COVID-19 leave, and further income support for those who have lost jobs. Cost: NZ$ 12.2 billion.
- Italy announces new stimulus measures as an emergency response. It is focused on direct support for families, and includes measures to suspend ‘all firing procedures’ across the country. Cost: $US 25 billion.
- Denmark announces a stimulus package that is aimed primarily at avoiding mass layoffs in the private sector. The plan will see the Danish Government spend the equivalent of 13 percent of its GDP on a 75 per cent wage subsidy to employers, effectively transferring the payroll burden from employers to the state. Cost: US$41.3 billion.
Notable Milestone: WHO declares a pandemic
- Australia announces its first stimulus, consisting of $750 cash payments to those on existing Commonwealth payments, investment incentives for almost all businesses, and support for small businesses who employ apprentices. Cost: AU$17.6 billion.
- United States’ House of Representatives passes legislation ensuring free virus testing, expanded unemployment benefits, providing sick leave to some workers impacted by COVID-19, and granting further funding to Medicaid.
- United States’ Federal Reserve injects $1.5 trillion of liquidity into the banking system. Cost: US$1.5 trillion.
- United Kingdom announces its first stimulus, granting tax cuts to retailers, cash to small businesses, sick leave for those self-isolating, a subsidy to cover sick pay, and expanded access to benefits. Cost: US$37 billion.
- Ireland announces first round stimulus, focused on direct cash payments to citizens of 650 Euros each. Cost: 3.1 billion euros.
- Japan announces second stimulus package worth focused on supporting small and mid-sized firms and self-employed workers. Loans of up to 300m yen at less than 1% interest to SMEs whose sales have declined more than 5%, and the government will pay interest on loans for SMEs and self-employed who saw a 10-20% decline and have to borrow from a bank. Cost: US$15.8 billion.
- United States announces a stimulus focusing on funding research for a vaccine, giving money to subnational governments to fight a vaccine, and allocating money to help stop the virus overseas. Cost: US$8.3 billion.
- Italy doubles original stimulus measures announced four days prior. Cost: 8.1 billion euros.
- United States Federal Reserve cuts interest rates by 0.5 per cent.
- South Korea announces stimulus focusing on small to medium businesses struggling to pay wages and child care subsidies. Loans will be made on relaxed terms to affected exporters while people who have lost jobs will be re-trained. Cost: $15.9 billion.
- Italy announces its first stimulus, focused on expedited tax credits and a cash infusion for the health system. Cost: 3.6 billion euros.
Notable Milestone: Global cases reach 85,000.
- Hong Kong announces a stimulus package as part of its scheduled budget. The package gives $1200 to all residents, covers rent for those in public housing, cuts taxes for business and workers, provides low-interest liquidity to businesses, and offers direct cash payments to those on benefits. Cost: US15.4 billion.
- Singapore announces several measures aimed at keeping workers in jobs. This is among the first international economic responses to the virus. The first is called a ‘Jobs Support Scheme’, where firms are helped retain local workers and given an 8% wage subsidy for local workers. The second is a direct Wage Credit Scheme. The package also includes corporate tax reimbursements, and low-interest Government backed loans to support business cash flow. Cost: S$4 billion.
- China’s PBOC cuts interest rates to 0.10 per cent.
- China’s Central Bank (People’s Bank of China) injects liquidity into financial system. Cost: US$245 billion.
Notable Milestone: Australia records first case of Coronavirus.
- Australia records first case of coronavirus.
Notable Milestone: Chinese authorities formally notify WHO of a novel coronavirus in Hubei Province.
- World Health Organization is made aware of novel coronavirus.
- Coronavirus infects 55 year old patient in Wuhan Province, China.