Subscribe to Our Newsletter

We know you love savings. Sign up for more!

Poverty Line M’sia: M40 Before? You Could Be B40 Now

Updated 27 Aug 2020 – By Faiz Rahim


Did you know that our gomen has revised the country’s poverty line? In case you missed it, in early July 2020, the Department of Statistics Malaysia (DOSM) has set the new poverty line income at RM2,208. That’s a HUGE gap if you compared it to RM980 back in 2016. 

Although RM2,208 is enough for some households, many are still way below the poverty line income. 

SIDE NOTE: Poverty line is a level of household income (inclusive of personal and family income) which an individual is considered to be living in poverty according to the governmental standards. It’s usually calculated by finding the total cost of all the essential resources that an average human adult consumes in one year.

 

Here’s the drama to why our gomen revised the poverty line...



Back in 2019, a UN representative criticised our country because the low poverty rate doesn’t reflect the cost of living. Yup, our poverty rate was about 0.4% back in 2016, which was a drop from 49% in 1970. And you’d think that was good but actually very questionable. With the previous poverty line of RM980 per household in a month kan, an urban family of 4 surviving on RM32 per day. Not gonna lie though, that’s quite a long stretch for just RM32... 

As it doesn’t mirror the reality we're living in, every decision and policy that comes from it will not be efficient. It is because the existing policies do not consider every community. It’s like you want to enforce a new system/procedure without considering other people’s POV that is affected. 
 


ALSO READ: Azam Tahun Baru Nak Menabung? Nah, 7 Idea Untuk Menyimpan

 

So, how did the gomen come up with the numbers??

According to MyMetro kan, the new poverty line is based on the new benchmark of rakyat’s current needs and necessities such as foods, clothes, house etc. Back in 2005, the old methodology that was used based on basic necessities for the household to live healthy and active. As with the new methodology, the gomen would have to factor in basic necessities that have optimum food intake and high-quality essentials (non-food). Basically, the benchmark has been changed from ‘minimum’ to ‘optimum minimum’. Fret not if you’re still confused, here’s a few examples…

1. The gomen used to take sweetened condensed milk in the previous methodology but with the new one, they’ll have to take milk powder which is much high quality and healthier option.

2.  Or the gomen used to take a normal 5kg white rice at the price of RM13. However, with the new method, the gomen will choose a much healthier and better option although the price is doubled.

Minister Datuk Seri Mustapa Mohamed also mentioned that the gomen is taking into account the improvement of the food quality based on the food pyramid. This is why it’s essential to align our daily physical activities with a much healthier lifestyle. 

 

Source: MyHealth

The gomen also added new items to factor into the poverty line such as a handphone among many others. It’s used to be a luxury item, but it’s a necessity now. Imagine going through a day without your handphone? It’s like walking without a sense of direction (at least for admin lah!).

With that said, you guys might be wondering if there are any other ways to count the poverty line? Apparently, we can calculate the poverty line from different aspects. It could be in the form of healthcare, education, housing, and etc. Let’s say for the sake of example; a family have zero/limited access to these aspects, they would be considered living under the poverty line. 

ALSO READ: Langkah Kewangan Yang Korang Boleh Ambik Bagi Hadapi Covid-19

 

So, how will this affect M’sia and its people? 

1. Improve the country’s policy



As the poverty line has changed, the country’s countless policies should follow suit (which it’s given lah kan?). That’s why the Minister of Federal Territory Tan Sri Annuar Musa inform us that the gomen will include it as they come up with new strategies such as Bajet 2021 and Rancangan Malaysia Ke-12, which will be announced by late 2020 or 2021. Once we have every policy to mirror the exact reality we’re living in, then we can truly say no one is left behind...

 

2. Increase the minimum wage

Source: MySumber
 

Are you guys done checking which group you fall into? Lol, no worries, admin just did the same thing as well. 

So with the poverty line has been revised, the household income couldn’t help but be affected as well. It’s like a domino effect. Now, the limit for household income for group bottom 40 (B40) has increased up to RM4,850. As for the household income for the bottom 10% (B10) group, it is now at RM2,500. The gag is that the minimum wage is just RM1,200. How is that make any sense as many rakyat marhaen would be in the B10 group?

Whether they like it not, the gomen would have to increase the minimum wage. Just imagine, a married couple with children have a total salary of RM2,700. After taking out the monthly deductions (EPF etc.), their net pay would be under RM2,500. With the current living conditions, how do you think they’ll do? 

 

 

The takeaway here is that...

Our country has a long way to go to solve this poverty issue. We still have many things to improve on, and we need every help and cooperation that we can get. What’s the point if the gomen has increased the minimum wage, but the companies decided not to follow? There should be some check and balance, or else it’ll just become useless...

Hopefully, we’ll be able to solve this issue in the coming years. Or at least, we would be able to reduce the poverty rate. Maybe we’ll achieve the 0.4% poverty rate for sure this time (wouldn’t that be great!). What is the point if we are on our way to becoming a developed nation, but our people are left barely scraping by? Let us know your thoughts on this in our FB comment section! 

ALSO READ: 5 of the Most Foolish Things to Do with Your Finances in Your 20s

Continue reading...

Suggested Articles

Smoker on a Budget: Cigarette, Rollie, Vape or IQOS?

Smoker on a Budget: Cigarette, Rollie, Vape or IQOS?

How Banks Fooled You with the Rule of 78

This Is How Banks Fooled You With the Rule of 78

RON 97 Increases Your Engine Performance. Truth or Myth?

Latest Petrol Price Update RON95, RON97 & Diesel in Malaysia