Cost of living index to include more categories, says PM Anwar

KUALA LUMPUR:The Cost of Living Index, which the government is developing, will include more categories and basket of items, says Datuk Seri Anwar Ibrahim.

These include food and non-alcoholic beverages, clothing and shoes; housing,water, electricity, gas and fuel; home maintenance; healthcare; transport; information and communication; and education, among others, the Prime Minister said.

Anwar said the basket of items taken into account by most countries when measuring cost of living may be limited and some of these items are usually not factored in.

“The Consumer Price Index (CPI) is not perfect. Current times calls for changes.

"The needs in Kuala Lumpur will not be the same as in Hulu Terengganu,” he said during Prime Minister’s Question Time in the Dewan Rakyat on Tuesday (July 2).

"Therefore, the index must be altered. This is based on a meeting we held in March, where we had decided that the cost of living indicators had to be in line with the current developments,” he added.

The index is measured based on the cost of living in 13 states and three federal territories as well as 162 districts.

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It takes into account the Marginal Propensity to Consume and Purchasing Power Parity.

“We admit that there is a problem due to rising cost of living even before the rationalisation of diesel subsidies,” he said.

“The solution is to increase subsidies for the people who are burdened and affected. Yes, there is a problem in implementation which we have to manage, but don’t forget that there are a lot of cases of leakages and theft (of subsidised items).

"This includes leakages to fishermen who are foreigners,” he said, adding that through stringent enforcement action, the losses could be recouped.

He was responding to a question from Datuk Rosol Wahid (PN-Hulu Terengganu) on the update of the index to measure cost of living.

The National Action Council on Cost of Living (Naccol) had agreed, in March, to allow the Statistics Department Malaysia to develop new indicators to measure the cost of living standards right down to the district level.

These indicators would help the government draft accurate and effective programme implementation.