A global health & economic challenge
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 to an effective doubling of Newstart and free childcare 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, predominately from OECD nations.
- Indonesia has budgeted for aggressive spending to sustain the country’s post-COVID recovery. Measures include subsidised loans for small businesses and cash assistance for low-incomer families. The Indonesian economy experienced its first second quarter of negative contraction since the Asian Financial Crisis in 1999. Cost: $USD $101 billion.
Victoria sees a significant ‘second wave’, as NSW and SA close their Victorian border.
The Australian Government announces JobKeeper and JobSeeker 2.0.
- The UK has announced significant investments in cycling and walking infrastructure to boost the number of people cycling and walking during and after the pandemic. New protected bike lanes, cycle training and bike repair vouchers will be included in the package. Cost: £2 billion.
- The European Union has struck a major deal with two elements: the regular EU budget, or multiannual financial framework (MFF), worth nearly €1.1trn over seven years; and a €750bn “Next Generation EU” (NGEU) fund to help countries recover from the covid-19 recession. Cost: € 1.8 trillion.
- Australia has announced changes to key coronavirus economic stimulus support payments, JobKeeper and JobSeeker. While the two payments will be extended until March next year, the payments will face a tapered reduction. JobKeeper will fall from $1500 a fortnight to $1,200 for people working over 20 hours and will fall to $750 for those who do not. JobSeeker will fall from $1100 a fortnight to $800. Cost: $19.8 billion.
- South Korea has launched a Green New Deal to create jobs and help its economy recover from the impact of the coronavirus. The plan would move Asia’s fourth-largest economy away from its heavy reliance on fossil fuels and promote environmentally friendly industries powered by digital technologies. Cost: 114.1 trillion won.
- Spain has produced a green COVID-19 recovery plan consisting of 26 measures for water infrastructure projects, climate change, natural spaces and the local economy. Cost: £1 billion.
- The United Kingdom announces a new “green package” stimulus. It will include funds for new green homes, as well as the insulation of public buildings. The measures are designed to aid the COVID-19 recovery, but also meet the UK’s ambitious 2050 target for net zero carbon emissions. Cost: £3 billion.
- Australia has announced additional economic stimulus to support the remote communities and businesses of Norfolk Island and Christmas Island and the Cocos (Keeling) Islands, as part of Australia’s COVID-19 response. Cost: $13.5 million
The United States records 57,468 new cases, the largest ever single day increase in a single country.
- The European Union has announced that the bloc’s flagship fund will wean regions off fossil fuels and want to set up a €40 billion Just Transition Fund, comprised of €30 billion from an EU coronavirus recovery fund and €10 billion from its budget for 2021-27. Cost: €40 billion
- Australia has approved a stimulus package for the arts and recreation sector, one of the worst industries in Australia to be impacted by COVID-19. The package will help Australian production and events businesses, with grants ranging from $75,000 to $2 million. Cost: $AUD 250 million.
- Japan has approved additional funds in the country’s budget for anti-coronavirus measures. This is the second stimulus package following the initial round of funding in April. The stimulus allocates funds for health workers, development of drugs, supporting entrepreneurs and the country’s regional populations. Cost: $298 billion
- Hong Kong has announced a rescue package for Cathay Pacific airline. The government will be issued HK$19.5 billion of preference shares, HK$1.95 billion of warrants and will provide a HK$7.8 billion bridging loan. Cost: USD $5 billion.
- Malaysia issued a stimulus package providing an array of tax incentives, financial support for businesses, and wage subsidies. Cost: USD $8.1 billion.
- Germany agreed to another round of stimulus to spur short-term consumer spending and to revitalise business investment. The package includes a temporary reduction in value-added tax, money allocated to build out its 5G data network and improve railways, and double incentives for electric vehicles. Cost: 130 billion euros.
- Taiwan announced a stimulus voucher program to begin in July. Residents will receive T$3,000 for every T$1,000 of vouchers they buy. Around 1.2m low-income households will be given a transfer payment ofNT$1,000 which can be put towards their stimulus voucher. Cost: T$50b.
Notable Milestones: Global deaths surpass 250,000 and the amount of reported cases surpasses 4 million. The first new cases since early April have emerged in Wuhan, the pandemic’s origin city, raising fears about a second wave spreading across China.
- Singapore has unveiled their fourth stimulus budget with measures including enhanced wages support for businesses that cannot resume operations; waivers and rebates in foreign worker levy for companies in selected industries such as construction; rental waivers and relief for SME; expanding the number of job opportunities in public and private sectors. Cost: US$23.2b.
- China announced a raft of measures following the annual Two Sessions meeting. The Government will continue to exempt services from VAT taxes, as well as reduce the rate of those that are still subject to the tax. The Government will issue US$140b worth of special treasury bonds that are a key source for infrastructure funding. This funding is likely to target investments in 5G networks and new energy vehicles charging stations. Cost: $US506b.
- New Zealand announced a COVID-19 recovery fund as part of the federal budget. The fund includes setting aside $20b for future projects. The budget also includes extending the wage subsidy payment for another 8 weeks for businesses suffering at least a 50% loss of revenue. Cost: NZ$50bn.
- India unveiled a plan to aid small and medium businesses as part of a stimulus package worth 10% of India’s GDP. Cost: US$226bn.
- Brazil approves a package to assist the nation’s states and cities as the country’s revenues fall whilst welfare costs continue to rise. The country has the most amount of cases in Latin America. Cost: US$10.5bn.
April 15-30, 2020
Notable Milestones: Cases surpass 2,000,000 globally; United States withdraws funding from the World Health Organisation; OECD spending tops US$6 trillion.
- Japanese Government passes a supplemntary budget to cover interim costs of COVID-19. Cost: US$240bn.
- President Trump signs into law the US‘ latests stimulus package. Cost: US$484bn.
- South Korea’s two major state-owned banks offered a bailout package to the country’s struggling airlines. Cost: US$2.3bn.
- Slovenia implements a second stimulus package, focused on providing support to small businesses to keep a lid on unemployment. The package is designed to provide a credit bridge to businesses in the country, before a third ‘recovery’ package is unveiled by the end of May. Cost: 2 billion euros.
- Mexico, which has been criticised for a slow economic response to the fallout, has finally released its stimulus plan. President Lopez Obrador announced a package focused on expediting infrastructure projects, and provide direct financial support to low income earners, and an expansion of social programs. Details are still forthcoming. Despite being elected on a progressive populist platform, the Mexican President has emphasised his fiscal conservatism, and there is an assumption that this new expenditure may simply be reoriented from other government programs, rather than entirely new spending. Cost: US$25.6 billion.
- The United States congress passes an additional support package. The package directs more financial aid towards small business, after the initial packages had failed to be adequately delivered. The package also includes direct financial support for hospitals nationwide. President Trump has indicated he will sign the deal. Cost: US$484 billion.
- The South Korean president ‘earmarked’ a bailout package for struggling South Korean industries, including the airline and shipbuilding sector. The new packaged will also include direct financial support for small business. Cost: US$32 billion.
- South Africa enacts its first major stimulus, after a smaller support package was announced in March. The package, worth close to 10 per cent of the South African GDP, focuses primarily on providing financial assistance to the health system, to local governments to ensure social distancing and hygiene standards are achieved, and direct financial support through ‘social grants’ to low income earners. Cost: US$26.26 billion.
- France announces a new round of support, focused on direct payments to to hospital staff, low income families, and the unemployed. Small businesses have been allowed to suspend utility payments. Cost: 110 billion euros.
- Japan announces further detail to its April 6 stimulus, offering direct cash payments of 100,000 yen (US$928.20) to all households in Japan.
April 1-14, 2020
Notable Milestones: Cases surpass 1,000,000 globally, UK Prime Minister in Intensive Care with Virus.
- The European Union agree to a bloc-wide economic rescue package. The deal includes new lines of credit to members, an increasing in the lending capacity of the European Investment Bank, and 100 billion euros for a new unemployment insurance scheme. Cost: 500 billion euros.
- Italy unveils a new package that will guarantee loans to businesses in the country, covering from 90 – 100 per cent of the debt for smaller businesses, 70 – 80 per cent coverage for larger firms and loaning up to €800,000. Work taxes will also be suspended for the next two months, costing the government up to €10 billion. The total cost of the package is 400 billion euros.
- Japan unveil its third major stimulus commitment. The package, worth around 20 per cent of what is the world’s third-largest GDP, will include cash handouts worth 6 trillion yen for households and small businesses hit by the virus and offers businesses deferrals on tax and social service costs worth 26 trillion yen. Cost: US$ 989 billion.
- Hungary announces a relief package equivalent of 20 per cent of GDP. One of the later stimulus measures in Europe, the plan follows other countries’ leads in offering low-zero interest loans to businesses, and measures to keep employees tied to their employer. The announcement comes soon after Hungary’s Prime Minister, Victor Orban, oversaw new emergency legislation that granted his office an unprecedented degree of authority while sidelining parliamentary opposition, leading to calls for Hungary to be removed from the EU. Cost: US$30 billion.
- Singapore announce a third stimulus. The package, the Solidarity Budget, was announced in preparation for another extensive lock-down the country have been asked to engage in for four weeks. The provides further direct support to businesses and citizens over the four week period. Cost: US$3.5 billion.
- Switzerland offers more direct support to businesses, doubling its original lending facility. Cost: $US41. 2 billion.
- The German Government mulls post-COVID stimulus measures focused on investing in clean energy.
- The European Union Announced the SURE initiative which will provide up to €100 billion in loans to countries that need it to ensure that workers receive an income and businesses keep their staff. Farmers and fishermen will also receive support, as will the most deprived. Cost: 100 billion euros.
- The Australian Government announces it will provide free childcare services to families across Australia, a major policy announcement that aims to provide a lifeline to the ailing childcare sector as well as provide financial relief for families. Cost: $1.6 billion.
- Countries across East Africa begin coordinating economic and health responses, which includes the creation of an ‘anti-COVID-19 Africa Fund‘.
March 15-31, 2020
Notable Milestone: Cases reach 700,000 globally.
- Indonesia announce further stimulus, including a three-point reduction in the corporate tax rate to 22%. Other measures include expanding social welfare to benefit up to 10 million households, food assistance and electricity tariff discounts and waivers. Cost: US$24.6 billion.
- Greece introduces a one-off payment to 1.7 million workers who have been displaced by the crisis. Cost: 6.8 billion euros.
- Australia announces a wage subsidy package, following the UK, New Zealand, Canada, Ireland and Denmark in assisting business’ to cover payroll for up to six months. The move came after the Government first dismissed the idea, instead focusing on providing relief for workers through the welfare system, and a concerted campaign by business and unions to adopt a UK style wage subsidy. The package delivers $1500 a fortnight to employers to pay their workers, and is due to last for 6 months, back dated to the beginning on March 2020. Cost: $130 billion.
- Israel prepares a second stimulus package over 20 times larger than its original package. The stimulus will include an NIS $5 billion fund to help small business and NIS 6 billion for large businesses. The deal also includes a fund for leveraged loans to help businesses that have already taken on considerable debt manage the credit crunch as the global economy contracts. Cost: US$22.44 billion.
- Greece announce a package worth 3.5 per cent of GDP, offering direct payments to the 81 per cent of private sector workers believed to be out of work due to lockdowns. The package also provides tax relief for small businesses, and introduces a value-added-tax holiday. Cost: 6.1 billion euros.
- Australia announces a further package focused on providing rebates for tele-health, funding for mental health services and domestic violence prevention, and additional cash for emergencies. Cost: AU$1.1 billion.
- Brazil release multifaceted package which includes wage subsidies, the suspension of principal and interest payments on loans, and alleviating debt constraints for subnational governments. Brazil’s state development bank has also promised BRL$2 billion to help health companies increase the number of special equipment and emergency beds. Cost: US$19 billion.
- 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.
- German leader Angela Merkel agrees to an enormous stimulus package focusing on providing up to 15,000 euros in direct payments to small businesses and the self employed, the creation of a ‘stabilisation fund’ providing credit to firms. The package is split in two components – the first is a ‘debt-financed supplementary budget’ of 156 billion euros, with the stabilisation fund worth 600 billion euros. Cost: US$810 billion.
- 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.
- Switzerland announce a second package. The new package provides direct income support to workers, as well as low interest loans for businesses. Cost: US$32.7 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.
March 1-14, 2020
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.
- Sweden announce a support package focused on providing paid leave for those who don’t have it, as well as covering paid leave for all workers instead of businesses for the months of April and May. Cost: US$29.86 billion.
- Germany announces its first support package, focused on providing a ‘short-time working hours allowance’ and a deferral of tax payments.
- 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.