PETALING JAYA: Economists are calling for a comprehensive evaluation to be carried out based on one’s net income, location and financial commitments when calculating the cost of living.
Prof Emeritus Dr Barjoyai Bardai said the financial status of a household should not be based on the number of family members as those who are working might not contribute toward the expenditures of a home.
He said the measure of one’s income should also be based on their take-home pay and not gross salary which is subjected to statutory deductions.
“There are also those with housing and vehicle loans. All these count in determining income, the ability to live comfortably and how wealthy one is.
“Many people are wealthy but do not have liquidity. For instance those living in Taman Tun Dr Ismail are wealthy as they live in properties worth above RM1mil but they have low liquidity as most of them are retired and have no source of income.
“Whereas those in a lesser affluent neighbourhood nearby may have greater purchasing power.
“This is why we need to determine what is the take-home pay of a person.
“In Kelantan where the cost living is lower, if you earn RM7,700, you are in the T15 category but in the Klang Valley one needs to earn three times more.
“This is why we need a comprehensive evaluation and not generalise a person as maha-kaya (super rich) just based on their gross income,” Prof Barjoyai said.
He said with the country heading towards an ageing society with over 16% of the population aged 65 and above, the government should also look at the financial commitments working adults bear to care for their parents.
