KUALA LUMPUR: Households in five areas within the Klang Valley have been found to have some of the highest basic monthly living expenses in the country, required to support at least four people.
Households in Petaling, Gombak, Klang, Putrajaya, and Kuala Lumpur are reported to need between RM5,188 and RM6,490 a month, according to the calculation method for the Basic Expenditure of Decent Living (PAKW) developed by the Department of Statistics Malaysia (DOSM).
Other major cities such as Johor Baru, Seremban, Kuantan, and Kuching also recorded high monthly PAKW rates, with some exceeding RM6,000 a month.
PAKW refers to the amount of monthly spending required by households or individuals to meet their needs and wants, including food, and to participate in social activities.
It is also one of the indicators used in the implementation of targeted subsidies and other assistance programmes by the government.
The PAKW value is influenced by two main factors: location and demographic characteristics such as age, gender, and household size. Therefore, the PAKW value for each household varies according to these demographic factors and their place of residence.
For comparison, the average monthly PAKW for households in Malaysia in 2023, as reported by DOSM, was RM4,729, with an average household size of 3.8 people.
Using the MyPAKW platform, developed by DOSM as a calculator or system for determining these values, the New Straits Times Press recently matched data for households of four people, consisting of two adults aged between 30 and 59 years and two children aged four to six years.
From this data, five out of 32 selected areas recorded the highest monthly PAKW rates, with Petaling in Selangor at the top, requiring RM6,490 per month.
The other areas are Kuala Lumpur (RM6,346), Johor Baru (RM6,003), Klang (RM5,960), Melaka (RM5,768), and Gombak (RM5,625).
The same data also shows that areas on the outskirts of the Klang Valley, such as Seremban, Gombak, Putrajaya, and Klang, are also feeling the impact of high living costs, with MyPAKW setting a monthly rate of no less than RM5,000 for each of these areas.
The PAKW rate for each area changes according to the specific data entered into the MyPAKW platform.
For example, the monthly rate for an individual living in Petaling, Selangor, is RM2,358, while the rate for a family of four in the same area is RM6,490 a month.
DOSM reported that comparisons between urban and rural areas show that PAKW values in urban areas are higher, with urban areas recording RM5,040, compared to RM3,631 for rural areas.
Factors influencing PAKW values include household size, age, gender, and location. Larger households require higher expenses to meet their needs for both food and non-food items.
The development of PAKW is based on the population profile, income or expenditure patterns of households, and the prices of goods and services in specific areas, all of which are obtained from various censuses and surveys conducted regularly by DOSM.
The same data matching also sets the lowest monthly PAKW for selected areas, with Gua Musang recording RM3,225, followed by Hulu Terengganu (RM3,598), Perak Tengah (RM3,599), and Bagan Datuk (RM3,368).
In Sabah, the PAKW rates are RM4,941 for Kota Kinabalu and RM3,688 for Tawau, while Kuching and Miri in Sarawak are at RM5,479 and RM4,992, respectively.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the PAKW value takes into account the needs and wants of individuals within a family, including recreation and social activities.
He stated that PAKW, developed in 2018, aims to provide guidance to the public on the average monthly expenses needed in each city or area in the country.
"In life, everyone's spending is unique because each person has different wants, but that doesn't prevent us from providing a figure that can be used as a guide, based on statistical knowledge," he explained.
"This guide (PAKW) is not black-and-white, right-or-wrong. However, it can reflect the cost of living in a given area based on the needs for both food and non-food items."
On the benefits of PAKW data, he mentioned that the value can serve as a reference between employers and employees to assess salaries and needs in a specific area.
He added that the PAKW figures could also be used as a basis for discussion with employers to determine appropriate salary levels for workers.
"If non-governmental organisations (NGOs) are planning corporate social responsibility (CSR) programmes, they can use PAKW indicators to determine which areas they should focus on to assist," he said.
On Sept 30, Prime Minister Datuk Seri Anwar Ibrahim stated that the government would shift to a more meaningful measure of poverty based on the concept of Net Disposable Income, which will be used to identify target groups for aid distribution and subsidy restructuring.
He added that the NDI concept would reduce errors of omission and be fairer, taking into account the PAKW, which refers to the cost of living required to lead a dignified and meaningful life.