Wednesday, October 8, 2014

'Did 3mil families suddenly become richer?'

4:56PM Oct 8, 2014
The government’s announcement yesterday that two million Malaysian households earn RM3,000 a month in 2014 has left one researcher scratching his head.

This is as this figure is three million households less than the number of households who received the Bantuan Rakyat 1Malaysia aid in 2012.

According to the government, 5.2 million households - or 80 percent of Malaysian households – earned less than RM3,000 a month and qualified for the BR1M.

"Did 3.2 million households suddenly clear the RM3,000 per month threshold?

"Is it temporary effect of BR1M injections or a more serious statistical error on the part of the government?" PKR think tank Institut Rakyat executive director Yin Shao Loong asked.

He also questioned if this also means that the government had "overpaid" in BR1M payments, to benefit those underserving.

Yin said that a look at government data from different sources leads to even further confusion.

So who is right?

In his budget speech in 2012, Prime Minster Najib Abdul Razak(below) said that 3.4 million or 53 percent of households earn less than RM3,000 per month.

And yet, he said, the Department of Statistics (DOS) Household Income/Basic Amenities Survey (HIS/BA) for 2012 reported that 38.5 percent of household earn below RM3,000 per month.

In 2012 itself, the Economic Planning Unit reported that 38.8 percent of households fall within that income bracket.

"This is a 0.3 percent difference with the DOS figure, but a whopping 14.2 percent difference with the prime minister’s figure.

"If HIS/BA 2012 is right it may mean that the government overpaid BR1M to 930,000 households in 2013, representing an estimated overspend of RM490 million…

"Is this a gross statistical error or was it a more cynical attempt to extend the reach of BR1M and affect voter preferences before the General Elections?

He added that such miscalculations could also mean that the government could have underestimated the impact of the goods and services tax (GST) and cut in fuel subsidies on low income households.

Yesterday, Minister in the Prime Miniter’s Department Abdul Wahid Omar said that 28.7 percent or two million Malaysian households earn less than RM3,000 a month.

He said that compared to 2009, 10 percent of Malaysian households have moved up from earning less than RM3,000 to more than RM3,000 a month.

GST impact

Meanwhile, PSM’s Sungai Siput MP Dr D Jeyakumar (below) urged the Finance Ministry to explain how it concluded that the GST will only cost families earning RM2,000 a total RM 46.94 a month.

He said that this shows that the government assumes that prices of goods and services will not rise in general in response to GST, even if it is not directly affected.

"This is the normal behavior of businessmen. They will use any opportunity to hike up prices if they feel they can get away with it.

"Is your ministry in a position to monitor and prevent all of this.

"If not, then shouldn’t you review the assumptions made in your calculation of the impact of the GST on the budget of lower income families?" he said, in an open letter to Finance Minister II Husni Hanadzlah.

Husni had last month said that expenditure of families earning RM2,000 and less will rise only 2.35 percent with the GST.
~ Malaysiakini

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