PETALING JAYA: Malaysians can now get a clearer picture of the minimum amount of money they will need each month to afford a decent living in each district nationwide.
The Basic Expenses for Decent Living or Perbelanjaan Asas Kehidupan Wajar (PAKW) is a newly-created cost of living index calculated based on 419 items covering food and clothing to utilities and transportation.
“The PAKW measures the amount of spending required by a household to lead a decent life that meets their needs and wants, and allows participation in society,” chief statistician Datuk Seri Dr Mohd Uzir Mahidin told a recent media briefing on the index.
The PAKW, which was developed by the Statistics Department, was launched yesterday by Prime Minister Datuk Seri Anwar Ibrahim.
The index comes with an online cost of living calculator known as MyPAKW, which can be accessed online or downloaded from the Apple App Store and Google Play.
The calculator allows users to check monthly cost of living expenses in each district according to the size of a household.
They can do so by selecting a location followed by the number of persons in a household, and the gender and age group for each individual.
A check on the calculator shows that a family of four, comprising parents aged 30-59 years and two children aged 10-12 years residing in Kuala Lumpur, would need a minimum of RM6,549 each month.
Less than half the amount is needed for a similar household in the rural district of Jeli, Kelantan, where expenses for a decent living would only total RM3,046.
Uzir said the PAKW provided a more accurate calculation of the cost of living compared with current indicators.
He said the PAKW could help the government design more targeted aid for the needy.
Uzir said the index could also be useful for businesses, allowing them to gain better insights about the cost of living of their employees in various locations.
While the PAKW index is based on a wide range of common expenses, it did not include items such as housing loans and other household debt.
Uzir said this was because certain expenses vary greatly between households and individuals.
“For example, some people may take smaller home loans while others take more for a bigger house,” he said.
The PAKW index does, however, include accommodation rental since accommodation is a basic need.
During the briefing, Uzir shared figures including the average amount that each household and individual would need to spend on food.
For example, the PAKW’s recommended minimum spending for food in Kuala Lumpur was at RM467 per person per month.
Asked whether he felt the figure was too low, Uzir said the calculation was based on the Health Ministry food pyramid which determines the daily calories needed by a person.
He said it did not include pricier food options.
Uzir said the PAKW figures, which will be updated annually, could serve as a reference for the government to identify what people in various locations need to afford a decent living.
It also identifies the gap in the cost of living between districts as well as between rural and urban areas.
“The government now has another tool to calculate what Malaysians need to spend to have a decent living, but it does not necessarily mean that all households who fall below the figures listed in the PAKW calculator are poor.
“With this tool now available, ministries and agencies will be able to hold discussions and decide how they can use it,” he said.
