What is a true reflection of the cost of living? Is it the Consumer Price Index (CPI) or simply the price hike of KFC’s dinner plate? In an attempt to answer that, Putrajaya introduced a guide book on that.
According to Malay Mail, the government has planned out an index to measure the cost of living to assist employers in determining the right salary increase.
Finance Minister Lim Guan Eng said the current Consumer Price Index (CPI) did not portray the actual situation as it comprised several other factors, for example, an estimate on business production cost and input cost.
“What is intended will not be achieved if we still use CPI as a reference point to determine the amount of salary hike.
“I have brought this matter to Bank Negara Malaysia.
“Maybe the EPF can do the same because at least there are two models for we to compare the indexes to accurately measure the cost of living,” Lim said that in his speech during the launch of “Belanjawanku — Panduan Perbelanjaan untuk Individu dan Keluarga di Malaysia” in Bangi yesterday (Mar 4).
The Finance Minister also said that between 2013 and 2017, a total of 100,610 Malaysians were declared bankrupt, 60% of which were aged between 18 and 44 years old, The Star reported.
Apart from the youth, Lim noted that senior citizens are also facing serious financial challenges, particularly when it comes to their retirement.
Based on estimates by the Employees Provident Fund (EPF), he said that as of 2019, an individual requires savings of at least RM240,000 by age 55 in order to retire comfortably.
“However, based on the EPF 2017 Report, active contributors aged 54 have average savings of only RM214,000 in their accounts,” said Lim.
Lim noted the low amount of savings were inadequate and estimated to run out in five years after retirement although the average life-span of Malaysians is 75 years. He said that Malaysians must improve their financial knowledge in order to make the right decisions in terms of spending and investment.
“Belanjawanku” is an expenditure guide that provides the minimum measurement of monthly expenses on various goods and services needed by every household in Klang Valley to achieve a comfortable standard of living. It also provides an overall construct including on the provisions of basic needs, social involvement, recommended savings, social repayment and the practicality of managing expenses.
In the guidebook, it stated that a single Malaysian that does not own a car can live a “comfortable standard of living” with RM1,870 a month, while those who own a car can survive with RM2,490. Below are the full breakdowns of estimated budgets for people in different stages of life:
Netizens felt the Belanjawanku Guide is unrealistic to their current spending and salary.
One netizen said, “Housing RM300 includes rental, water, electricity, Indah water, property maintenance. Where can I get such a unit?”
“Healthcare RM30? Hello, my dog falls sick also (cost) almost RM150 bill ok?” another netizen wrote on Facebook.
One netizen even reflected the government announcement to the minimum wage and said, “You all people can just do whatever you want for a basic living cost for a single without a car is RM1870/monthly (when) the basic salary is only RM1100?”
The report noted that and contended despite RM1,870 budget is required by a single Malaysian living in the Klang Valley is higher than the current minimum wage of RM1,100 but the rakyat’s median wage in Selangor and Kuala Lumpur is RM2,580 and RM2,650 respectively.