Selangor raises poverty threshold to RM1,500

Selangor has raised its poverty income threshold to RM1,500, about RM700 more than the national level, to reflect more realistically the high cost of living in the country’s most developed state.

Menteri Besar Mohamed Azmin Ali said the new rate was “responsible” and part of his administration’s aims to raise incomes and broaden the middle class in Selangor.

After the revision, about 30% of Selangor’s 5 million residents will be classified as poor.

“As the country’s most developed state, Selangor cannot use the same poverty income threshold as Putrajaya. Therefore Selangor has set a threshold that is realistic and responsible which is RM1,500.

“According to this criteria, about 30% of Selangor’s residents would fall below the poverty line,” said Azmin while tabling the state’s budget today at the Selangor assembly.

Selangor has tabled a budget of RM2.42 billion this year, its largest in history.

Azmin said the state government would increase funds for its two micro-credit schemes, Mimbar (for the urban poor) and Skimsel (for the rural poor) to encourage more of the poor to become entrepreneurs.

The total amount of funds for Skimsel has been increased to RM60 million while Mimbar will receive a total of RM40 million.

“All these programmes will be part of our hijrah initiative, to help the poor graduate to the middle class,” Azmin said.

Economists and analysts have in the past questioned whether the national poverty rate was too low given rising inflation, especially in urban areas.

They have argued that the RM830 threshold should be revised to another measure that more accurately represents the cost of food, clothing, rent, utilities and other basic necessities that an average family of four need to keep themselves afloat.

The PR coalition has always maintained that the national poverty rate of RM830 is not an accurate gauge of poverty as it is not enough to meet the basic needs of a Malaysian household.

Poverty researchers such as Jayanath Appudurai have in the past proposed that the poverty threshold or poverty line income for Malaysia be revised to RM1,886. – November 24, 2014.