KUALA LUMPUR: The newly introduced Basic Expenses for Decent Living (PAKW) is a valuable resource for the public, offering insights into the monthly consumption expenditure needed by households or individuals to achieve a decent life that meets their needs and wants.
Economist Professor Datuk Dr Nik Maheran Nik Muhammad said the platform allowed the public to compare their expenses to a baseline, promoting better financial planning and more informed spending habits.
"It also provides valuable cost-of-living data for different regions, helping users assess their living expenses and make adjustments to stay within their means," she said.
Nik Maheran, who is Universiti Malaysia Kelantan deputy vice-chancellor (academic and international), said for the business community, PAKW provided insights into local basic expenditures, which could help them tailor offerings to match the financial realities of their target market.
"By knowing the average wages and spending capacity within a community, businesses can make informed decisions about pricing, product and service suitability, and compensation structures.
"This data helps businesses position themselves competitively, ensuring that their offerings align with the purchasing power of their market."
Nik Maheran added that for policymakers and aid distribution, PAKW is crucial in formulating policies, particularly for areas like affordable housing, public transport, and social aid programmes.
"Understanding the minimum income and basic expenditure patterns in different regions allows policymakers to tailor interventions to address specific needs, ensuring that aid reaches those most in need and promotes a standard of living that meets the 'decent' threshold," she said.
"It can also guide decisions around infrastructure development and public facilities by highlighting areas with higher cost burdens."
She suggested that the platform be expanded for policymakers, incorporating trend analyses on cost-of-living changes over time or regional comparisons.
"This could help forecast and identify areas where support is urgently needed, facilitating a more dynamic and proactive policymaking approach."
PAKW is calculated based on 419 items, covering food, clothing, utilities, and transportation. The MyPAKW calculator, developed to estimate total basic expenditure for a decent standard of living, uses location and demographic factors, such as gender, age, and the number of household members. Therefore, each individual and household has its own spending patterns.
The calculator informs the public of the reference value for basic living expenditure in their respective localities and areas.
Kedah Consumers Association president Yusrizal Yusoff said PAKW allowed individuals to plan their expenses based on their specific location.
"It serves as a valuable guideline to help people understand how much they need to live decently in different areas."
He added that public confidence in the data provided by the Statistics Department is high, which plays a crucial role in ensuring the effectiveness of such tools.
"As for policymakers, the PAKW data provides a clearer understanding of the financial situations of different groups and assesses the level of hardship faced by the people.
"For example, in cases where someone in a rural area earning RM5,000 per month may live relatively comfortably, the same income in an urban area may not suffice, as the cost of living in cities is much higher.
"This disparity between urban and rural living conditions can inform decisions on wage adjustments, subsidies and policies addressing these regional differences. By understanding these variations, policymakers can create more targeted initiatives."