PUTRAJAYA: The recent revision of the Poverty Line Income (PLI) that was done in 2019 will enable the government to formulate policies and strategies, as well as design more appropriate, dynamic and pragmatic approaches for each target group.
The PLI was last updated in 2005, and in 2016, it was RM980 a month per household.
The national monthly PLI was RM2,208 per household in 2019.
Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed said this during his presentation of "Setahun Malaysia Prihatin" at a press conference here on Thursday.
"The PLI method has been updated for more effective policy formulation and strategy implementation.
"Based on this new PLI, the poverty rate was 5.6 per cent (405,441 households) for 2019. The poverty rate in 2016 was 0.4 per cent (24,700 households), which was measured based on the 2005 PLI.
"This means that, if measured using the new PLI methodology, the country's poverty rate has decreased by two percentage points, from 7.6 per cent in 2016 to 5.6 per cent in 2019.
"This clearly shows the poverty eradication programmes and initiatives carried out by the government, supported by various parties, such as non-governmental and private bodies, have yielded good results," he said.
He said efforts to improve the poverty measures began from the presentation of the mid-term review of the 11th Malaysia Plan in October 2018.
Mustapa said the research was conducted by the Economic Planning Unit, the Prime Minister's Department, with the collaboration of the Statistics Department, the Health Ministry and several other ministries and related agencies from March 2019 to June 2020.
He explained that based on the review's outcome, the PGK methodology had been improved on three aspects.
"The concept setting of PGK food that is refined from 'minimum' to 'optimum minimum' is to calculate the improvement of the quality of food basket items based on the 2020 Malaysian Food Pyramid and food group diet guide, in line with daily physical activities and healthy living."
For example, sweetened condensed milk previously in food baskets had been replaced with healthier powdered milk.
"For non-food PLIs, the needs of the lowest 20 per cent (B20) households identified increased from 106 to 146 items. This means that 40 items that were not previously considered basic requirements for the B20 group, have now been included in the list.
"There were changes in household spending patterns, prices of current goods and services in 2019 compared with 2005."
Mustapa said besides using the PLI, the government had also used several other methods to measure the poverty rate.
One of them, he said, was the multidimensional poverty measurement method, which emphasised aspects of improving the quality of life, such as health, education, housing, living standards, access to information and household monthly income.
"Efforts to improve this method of poverty measurement are a manifestation of the determination, concern and transparency to ensure the wellbeing of the people.
"Ministries, departments and government agencies, including state governments, should take note of the 2019 PLI in planning their policies and programmes, as well as reviewing policies on poverty eradication and social assistance, including re-targeted groups under their supervision and responsibilities in the next five months."
Mustapa said the next revision would be done for the year 2021 to assess the impact of the Covid-19 pandemic on PLI.
It would be released next year, he added.