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Living on RM3,000: Who is the government kidding?

Ringgit

IT never goes down well, leaders telling citizens how to manage their finances. Especially when the public are more familiar with leaders who live lavish lifestyles than with those who live humbly.

The latest advice to the urban masses is that living on RM3,000 a month is “manageable”, provided one stops subscribing to Astro and owning a car. “This city is liveable for those earning RM3,000 a month, provided they do not live in luxurious places,” said Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Raja Zainal Abidin.

What can we make of such advice? Is the minister wrong or right? And in saying what he did, is the government being callous and missing other parts of the picture?

Making do

How would earning RM3,000 a month and living in the city be manageable or, conversely, a challenge? Let’s take a single person with no dependents. By conservative estimates, there are basics to cover like the monthly car installment (RM500), phone bill (RM80), room rental (RM400), and food (RM500). That leaves about RM1,000 to spare after deducting contributions to the Employees Provident Fund, Socso and income tax.

Where goes the remaining RM1,000 or less? Working singles are likely to set aside a sum for elderly parents. Some, especially if they are the eldest child, are tasked with helping their parents save money for their younger siblings’ education. There’s petrol if one has a car, personal grooming, the occasional trip to the doctor, or a family emergency. To have quality of life, you don’t expect people not to spend money on outings with friends or on entertainment just so that their budgeting is “manageable”. After all that, is there anything left for savings?

Yes, I know of single city dwellers who don’t own a car and use a motorbike or public transport, and who don’t hang out much with friends or enjoy nice meals, so they can stretch their ringgit. Some of these people draw far less than RM3,000 a month. The starting pay for graduates can be as low as RM1,800. Among non-graduates, a clerk or a despatch rider may earn only RM800.

(Wiki commons)

Raja Nong Chik (Wiki commons)

The above only looks at a single-person household. How much more difficult would it be for a four- or five-person household where one spouse doesn’t work? Do these families manage to save at all, or does everything go to just making ends meet? What does Raja Nong Chik expect of poor Malay Malaysian households where the median income is reportedly RM2,531 a month?

Settling for the minimum?

Those who agree with Raja Nong Chik concede that supporting a family on RM3,000 a month is a struggle, but add that a minimum level of comfort and ease can still at least be enjoyed.

What is “minimum”? If they cut their Astro subscription, there are still the five local television channels for news and entertainment. If they give up their car and rely on public transportation, they’ll still get to their destinations, albeit with a lot of time wasted. Public healthcare is cheap, public education is almost free, essential food items are subsidised, and public housing, if the family is able to secure it, is as low as RM150 a month.

“Hardship” is then relative, depending on personal and lifestyle choices. To live simply within one’s means, or to live on credit? To remain married or single? To have a few children, just one, or none at all?  The difference also lies in how much convenience or inconvenience one can take, and how much comfort or enjoyment one is willing to forgo.

With RM3,000, a struggling family can make ends meet, but will be less able to afford treats or holidays for the children. A single person can afford renting his or her own room, but a household earning the same amount has no choice but to squeeze four people or more into a tiny flat.

What’s missing?

Given the above scenarios for both a single person and a family, living on RM3,000 a month in the city might be “manageable”, albeit uncomfortable and stressful. But it makes the government’s call to “change your lifestyle”, just as it did after raising petrol prices, insulting. For many, there’s little more they can change.

Is it then realistic to expect people to continue living at the minimum of just being able to cover the basics?


Change Your Lifestyle

Of course, we have the government’s plans to raise income levels, to make Malaysia a high-income nation. But if plans for this, as outlined in the New Economic Model (NEM), are to focus on the low-income group, Raja Nong Chik, as a cabinet minister, should realise that 80% of households earn less than RM3,000 a month. Of this, the bottom 40% are earning less than RM1,500 a month.

Are there even enough households earning RM3,000 a month for him to say that living on that amount is “manageable”?

From what we’ve seen, there isn’t a concrete plan on how to raise the income of 80% of households earning less than RM3,000 a month. So far, it’s just a stated objective in the first stage of the NEM’s unveiling. Then again, the NEM apparently isn’t the government’s official position, but only a “trial balloon” by the National Economic Action Council. So says Prime Minister Datuk Seri Najib Razak in trying to distance the government from the NEM’s calls to adjust pro-bumiputera economic policies.

What then of the government’s 10th Malaysia Plan (10MP), which also targets per capita income increase? Among its objectives is to raise the average monthly income of the bottom 40% of households from RM1,440 to RM2,300 by 2015.

But it isn’t clear how the 10MP can achieve this. The status quo on bumiputera equity is retained, despite it having failed to distribute wealth equally among poor bumiputera. The plan mentions skills training for the unemployed, improving access to healthcare, housing and education, and income assistance for the poor. But all these are welfare measures rather than direct steps to increasing income.

Instead, plans for a minimum wage for security guards were scuttled, debate for and against a minimum wage aside. Calls to empower women to participate in the workforce have not been clearly translated into policy, despite the fact that the bulk of low-income earners are women.

What’s missing in public policy is a holistic perspective on just what it takes for the poor to get by daily. Little wonder, then, that some leaders can so glibly say that RM3,000 a month in the city is manageable.

Deborah Loh wishes that public transportation in the Klang Valley was more seamless and punctual so that her household could own just one car instead of two.

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31 Responses to “Living on RM3,000: Who is the government kidding?”

  1. lils says:

    How condescending! The first time I read the statement, I was completely repulsed. Now reading it again brings the same feeling.

    Can TNG please ask the Minister if he has ever lived on that amount (net off taxes, socso and EPF) and at the same time provided for his entire family (including parents of both spouses)? Not for ‘fun’ for a month – please ask if he will do it for a year or two.

    I have been there and done it – RM3,000 is not enough. Even without the ASTRO (which I still do not subscribe to). At present, with mouths to feed and minds to educate, most of us middle income parents have ALREADY reduced every form of luxury.

    It pains me to imagine someone living the higher income life presuming to know what we ordinary folks have to go through. Use your time to better the country’s prospects and economy, instead of belittling us.

  2. Miz Thang says:

    So will the MPs start the trend by setting an example and showing the rakyat how they can live on RM3000?

    Maybe that could form the basis of a new reality TV show.

  3. yeo kien kiong says:

    There are many people who are disabled, illiterate, or whose parents or relatives or friends have illnesses for whom the government seems to have exhausted their power and resources to help, as well as above people of a certain age, who [have] managed to find a job with less than RM600.

  4. Lainie says:

    Change my lifestyle? Can I just change my federal government please?

  5. Dexyfocus says:

    Raja Nong Chik is so so out of touch with reality. This makes him non-relevant to the rakyat. Vote such politicians out in the coming GE. Or was he a backdoor minister? Only in this country where can a short [person] cast a long shadow. When this happens, it signals the decadence of a country.

  6. Chen says:

    Cayalah! Leadership by example, Mr Minister. Perhaps we should propose for all ministers (those who live in the city, at least) to only draw a monthly salary of RM3, 000?

  7. Shelley says:

    What about us who have to support our parents, and perhaps younger siblings?!

  8. brain says:

    Parents on government pension, siblings working, none have money problems, I earn about RM4K, use motorcycle to work, [eat] home-cooked [food], stay with my parents, spend about RM2K on call girls… and I’m happy.

  9. Lellwyn says:

    Wow… it’s amazing such people still exist in our society. Then again it’s our fault that we have let them be for so long. That aside, everyone reading this, please share! As the saying goes, caring is indeed sharing.

  10. aboudiabydoo says:

    Actually, one CAN live with 3k a month in KL. The problem is so many Malaysians refuse to live within their means, esp the younger generation. I used to earn 2,000+ for years and years but still manage to live a decent life. The problem is so many people fail to discipline themselves and blind to the fact that life is tough and that you should discipline yourself. Now I’m earning 8k plus and I still use my old Satria and a 4-yr old handphone. Few of my staff (of course I know how much they earn) have better cars than me, much superior handphones and I see them regularly have lunch at places like secret recipe (that I still consider wasteful spending) and various cafes during lunch. So who to blame if you dont have enough money at the end of the month? The minister? The government? People better start looking at the mirror.

    • Paddy says:

      @aboudiabydoo

      Although you make a good point, I think you are forgetting about the people who have to support their families.

    • Lyn says:

      Of course one can even live on nothing and still survive. There are families of seven with fathers earning only RM600 and below a month, and they’re still alive. Yes, with no luxuries, of course.

      But what about their future?

      What about my future?

      I’m only 24 and my RM3K+ salary only allows me to live my life day by day. I realize that I am lucky to be one of the few at my age who earns that amount, and of course I can survive without luxuries, but it’s hardly enough to save for a rainy day after you deduct rent, car payments, petrol, insurance, phone bills, education loans, and let’s not forget those who help their family and siblings?

      What about my future? How can I afford to buy my own house? Till when am I supposed to keep on renting a room (since a house/condo is already deemed as a luxury)?

      What happens if I fall sick? I have an insurance policy right now, but you never know should I ever need to come out with my own money.

      What happens if my car gives troubles? A few months ago my car carburator and fan were giving trouble and it caused me over RM1k in total for a number of repairs. How would a salary, which only allows me to live day by day and not permit me to save enough, allow me to pay for this?

      And let’s not forget car maintenance, and yearly road tax. I wouldn’t mind using public transport if there actually was public transport in my area that would cater for my early morning work shifts.

      Dear aboudiabydoo, perhaps you should stop being too self-righteous and consider the CURRENT costs of living. When you were earning RM2k for the “years and years” you said and still lived a decent life, did you maybe consider that basic things, and even petrol, were much cheaper back then?

    • Miriam De Shield says:

      Let’s not miss the point. We have to remember it’s not about whether we can or cannot live under 3K/month. We are in-built for survival and will make it (as many already do, even under RM600/month with families).

      They tell us this, what next? Each part of society plays a role in balancing and checking the other. Including us, the people.

      Don’t excuse the government for using our tax money poorly, not providing adequate public transportation, and being poor at dealing with the many other things that are our right to whine and complain about, such as our good future so that we can compete in a globalised world.

      “Emancipate yourself from mental slavery”

  11. john cheras says:

    As a young professional I have to agree with Raja Nong Chick. I am sick and tired of people complaining about what is enough and what is not enough. I earn slightly more than RM3,000 a month, and I still have some money for savings, it is not a perfect life, but it is a good life.

  12. ismail says:

    At least with BN in charge, there is a debate about the 3k income. If Pakatan Rakyat takes control, lowers the price of petrol and toll, and gives rice for free, we will be bankrupt within six months. I say no to Pakatan! Then we will be North Korea with all their lies. In fact Lim Kit Siang does look a bit like Kim Jong Il.

  13. aboudiabydoo says:

    If I’m not earning enough, I find my own ways. If I’m spending too much, find my own way again.

    Don’t let anyone determine how much you are worth, not the government and not your boss. You decide. If you need more qualification, experience, connections, hard work… go for it and stop complaining.

    I feel many Malaysians, especially the middle-income earners, are living beyond their means. They want to live the ‘good life’ when they actually cannot afford to. Of course, everyone wants the ‘good life’ whatever it may be to the person, but we have to be realistic. If we cannot afford, then don’t buy. Its as simple as that, otherwise there is always a cheaper alternative. Don’t buy the thing and then complain that its expensive.

    @Paddy — I’m sure the Minister qualified his statement by referring to certain family units — maybe a couple with two children. Problem is, the report was very general. Of course if you have to support this and that member of family, you cannot afford. But I can proudly say I supported two babies and a lovely wife with RM2k+ and am still happy. Not rich, life was tough but happy.

    @Lyn — You should spend some of that money you earn buying a personal financial planning book, or attending a personal financial planning course. Society and the nation does not owe you a living, improve yourself, do MLM, sell insurance, sell unit trusts as part-time activity, not [complain] with people your own age at Starbucks complaining about anything under the sun! RM3k+ is a lot of money!

    Discipline yourself! The Minister is an accountant so maybe he does know what he’s talking about. Financial discipline is key!

    • Lyn says:

      @aboudiabydoo,

      Your comments are really prejudiced towards people like me, who earn that salary bracket.

      I am thankful for what I earn. I am however, like I said before, concerned about SAVINGS, as that’s the most important thing for me. You never know what can happen in the future.

      You can’t simply assume that I, or all the middle-income earners in Malaysia are living beyond their means and ‘complaining’ at Starbucks (which by the way is deemed a luxury for me). Do you know that some of us already work two jobs and have our own sidelines to garner that RM3,000 every month? Just because single people are not married and don’t have kids, does not mean they don’t help out with their families or siblings. We don’t just hang out and complain at Starbucks, which you seem to imply.

      YES, RM3,000 is a lot of money, but some people have more commitments than you can likely imagine. I’m not denying that I earn a lot for my age and I live a comfortable life with minimal luxury. What I stressed on about is my FUTURE and my family’s future, as the current salary does not permit me to really save as much as I would like.

      Sure you raised two kids and a wife back then. Can you honestly say that things were also not cheaper back then as it is today? Do you own a house now? Do you have enough savings should anything happen to your family? What happens when the kids get older, and they need proper education, and you’re still earning just RM3,000?

      Till when am I- or the majority of most people my age- supposed to keep on renting, when our salaries do not even permit us to afford to buy a house?

      Just because you can make it work on a minimal salary and raise a family- doesn’t mean everyone else is as capable as you are, or as willing as you are, to settle for just a day to day existence.

    • Paddy says:

      @aboudiabydoo,

      Again I’ll remind you I agree with your statement about the younger generation and their shallow image/wastage. However, you still fail to put yourself in the shoes of others hard working families. Yet one thing you have to realise is that people do not what to be “rich” like some of our ministers but just have enough to get by and maybe a little bit left to spoil themselves. We don’t even have a minimum wage in Malaysia, the taukes run wild leeching off the work and energy of hard working people.

      Your sure “the minister has qualified his statement”? Have you seen the antics of some of these “ministers” in parliament, the ministers obviously have their heads in the sand. In the article in question, he mentions that “that monthly rental for Kuala Lumpur City Council flats was only RM124 a month per unit”. The bigger question is, how many of these units are actually available and who’s foot you have to rub to get one?

      Let’s all do MLM, sell insurance, sell unit trusts as part-time activity? Are you living in a fantasy world? You think dual-income families, between working taking care of their families have time to do things on the side?

      I always tell my friends studying in countries like Australia, you want to work for someone else, stay in Australia, you want to run a good and guilt-free business stay in Australia, you want to run a business, evade taxes, take/give bribes and exploit people , then go back to Malaysia!!

    • MIchael says:

      Interesting how this argument’s points are similar against race based policies. I like the phrase ‘the world doesn’t owe you a living’.

      I think you missed the point though. The article’s pointing out how simply changing one’s lifestyle isn’t enough for some.

      Spending less and living within one’s means is universal advice [for] everyone and it is a good advice but it doesn’t apply to those who [have] already cut [down] to live with the bare minimum.

      Also, let’s not lump those who disagree with you into the same category as people who just need to work harder, change and stop complaining.

      Not everyone who says ‘money no enough’ goes to Starbucks ;)

  14. neptunian says:

    aboudiabydoo – is really talking nonsense! How about this? My father used to earn RM90/ month for years and years. I have 7 brothers and sisters than and we still got by. By that logic, aboudiabydoo overspent by RM1910/every month. I am sure he did not have to feed seven children, himself, his wife, and both parents!

    Wake up [...]! Hello! This is the year 2010.

  15. Precious says:

    So those saying that they can live within RM3k are probably still single, living with healthy parents who still support them in some aspects like their dinner meals and house bills.

    I am confident that they can’t sustain with just RM3k when they start a family and at the same time support their aging parents.

  16. Wan Kong Yew says:

    I don’t understand what the debate is about. Wages are determined by demand and supply, just like any other goods. It is and should not be in the government’s power to set the level of wages. That way lies communism and we all know what that path leads to.

    If you find that you’re earning less than the average at a given location, then the obvious implication is that you are worth less to your employer than the average. So you either work harder, improve your skills, or move to a less expensive location.

    Finally, for those arguing about the cost of raising a family, I think that’s putting the cart before the horse. A reasonable adult strives to achieve a measure of financial stability and then starts a family. He doesn’t start a family first and then hope that he has the means to support that family. Even then, reasonable adults plan their family properly and only have as many children as their earning ability is able to support. If you can’t feed that many mouths, then don’t have so many children!

    • Paddy says:

      @Wan Kong Yew
      Demand and supply? Good point, we have such a heavy reliance on foreign labour, its no one’s guess why wages are so low, how can you possibly expect our own rakyat to be paid a decent wage when the preference is to hire cheap foreign labour. People fail to realise that even if we do pay higher wages, that money will circulate into the economy over and over again. That’s were the government has failed to realise it’ll eventuate into a tax cash-cow time and time again, it insist on keeping wages low.

      Because if it feels like you’re not paying taxes, you might even “love” your government a bit more. Taxes in Malaysia are meant to make the poor feel like the government it taking money from the rich and providing for everyone, which clearly isn’t the case.

      Communism? Why is that such a dirty word, what does it lead to? Ever heard of China? If you cared to do your homework you’d realise that Marx was against measures such as minimum wages. Countries like the US, UK, Australia and many more other countries have minimum wages, they must be commies i guess, tsk tsk.

      I reckon all the low-paid workers in KL should just pack up and leave, who cares if there aren’t enough jobs elsewhere or what will happen to a city like KL or Singapore if these people just upped and left.

      Wow, you saying poorer people shouldn’t have children? You think that less educated people understand finances all that well? They live on a day-to-day basis, they get paid cash, they don’t need to think far ahead, they will never development a financial understanding.

      Get off your high horse, it’s easy for people with comfortable lives like you and me to point at the less fortunate and blame them for their misfortunes. Wouldn’t you get a greater sense of being from helping them improve their lives?

  17. simplicity says:

    I think depending on what kind of person you are, 3K is possible and also not possible. For the flamboyant and those needing to maintain social relationships, there is a possibility that you require more than just appearing as a friend such as getting really cool stuff so that there’s things to talk about (latest gadgets, latest clothing season…). Those who are conservative, homely, might be able to pull through with 3K. So, depending on what is your priority.

    I believe each person’s personal experience with financial planning is based on the priorities you have set when you come out to work. No amount of financial management books will tell you what will do well for you or not well.

    For me, I started off with 2K and I am very thankful my parents are healthy and living in the suburbs that make it easy to go to work. After 3 years, I’m now earning above 5K and already bought a house and getting ready to go back to studying for my Masters. I have a balanced social life, choosing my friends (there’s a big difference hanging out with a crowd that drinks, a crowd that goes on a food hunt, and a crowd who enjoys arts and literature). So it makes sense on the lifestyle one chooses. I am now taking care of all the household bills and pay rent to my parents. So, perhaps, the only difference is my parents are healthy (I know, medical bills for aging people are not cheap). My two siblings are still studying.

    As for buying a car and public transportation, again, it’s a personal choice to make. While public transportation is not exactly reliable, driving a car has its downs too; like being caught in a jam. I choose to take the bus (the LRT is the most reliable amongst all form of public transportation) and sometimes I do have to wait more than 30 minutes for one, but while waiting, I spend my time reading. If you’re stuck in a jam for more than 30 minutes, you can’t possibly read a book (but maybe you can go on Facebook/Twitter and post an update on it). Well anyway, my personal choice to take the public transportation is because I try to avoid taking up too many bank loans at a young age! A house loan however is better because property [appreciates] better than a car lah. :)

    But I do agree that the minister was generalising and speaking about something [about which] he doesn’t even know the real situation. Does he have a Mercedez/Perdana paid by our taxpayer’s money? And a new house he just moved into after he went into Cabinet with housing loans not under his care? And Astro with all channels/package included? Even if it’s not paid by taxpayer’s money… are those money halal ka? Atau haram?

  18. Kong Kek Kuat says:

    Dear Deborah,

    Would you provide the basis upon which the sum of RM2,531 a month for a Malay-Malaysian household (I am assuming that polygamous households were excluded from the basis) is derived from, please?

    [Dear Kong,
    The figure is in the link with the anchor words "Malay Malaysian" in the same paragraph; it is also in the 10 Malaysia Plan report in this link from the Economic Planning Unit website:

    http://www.epu.gov.my/html/themes/epu/html/RMKE10/img/pdf/en/chapt4.pdf

    Regards,
    Deborah
    Assistant News Editor
    The Nut Graph]

  19. the reader says:

    3k per month for one whole family of let say 4 is just ridiculous…its possible..sure…but hard…really hard..

  20. farah says:

    This article is doing a good job to help us see how bad the current condition is. RM3k is very subjective though – not everyone earns RM3k and those who earn RM3k have got a variety of demands.

    In the UK they have a minimum wage system. Flexible working hours to fit with children’s welfare, free health and education, and the list goes on. Although not everything is good to be followed as examples but when the general election comes – people will bring up these issues: health, education and welfare because those are the most important things a government should be able to provide. If a government can’t provide these, they should stop ruling the country.

    In Malaysia – blehh. When we raise these issues – we are being ungrateful and we are not disciplined.
    HAHAHA.

    We should change the government. Or our children will blame us for staying put for so long. 50+ years! Wth.

  21. Wan Kong Yew says:

    @ Paddy

    It is almost a universal consensus amongst economists that instituting a minimum wage at a level that actually makes a difference merely increases unemployment and generates inflation. You yourself note that upping wages causes more money to flow around in the economy. That it indeed does, and this causes overall prices to rise. Raising nominal wages is a false target to aim for when the true objective is to raise real living standards.

    Judging from the tone of your argument, I would suggest that your true line of attack should be against wealth inequality rather than an arbitrary and meaningless minimum standard of living for KL dwellers. I have some ideas on that score, but that would be off topic.

    You also make a good point about low paid wages leaving KL. So why don’t they? Perhaps because despite what you argue are atrocious conditions, they actually believe that they are better off working and living in the city? When in doubt, it’s not what people say that is to be believed, it is what people do. If KL is really that bad, people would be voting with their feet.

    I’m also going to ignore your jibe against foreign labour because I’d get too upset about it. Suffice to say that my political and moral beliefs are in favour of completely free movement of both capital and labour.

    It may sound fascist, but I do believe that poor people should not have as many children as they tend to have. If they are unable to plan properly, then it is surely the duty of the state to provide the provide education. I believe that this is a failure of family planning as a result of the religious influences in the country.

    Finally, I believe that your comments about “getting off your high horse” is awfully personal considering that you know nothing about it. For your information, I do not currently live in KL. I despise it as a city as I am unable to tolerate its traffic, high population density and poor environmental conditions. Consequently, I have voluntarily chosen to work in a far smaller city in East Malaysia and take a pay cut for doing so. And yes, I was born in KL. I invite everyone who claims not to be able to survive in KL for any reason, including its cost of living, to do the same.

  22. tareh says:

    First things first. Efficient, reliable, affordable and on-time integrated public transport, where is it, lah Encik minister? if everyone can be less dependent or be able to not use a car – that would be a good start. So we don’t have to pay for the monthly car [installment], road tax and insurance, monthly office parking, car maintenance, etc etc.

    Start one thing at a time.

    But Malaysia is building a new multimillion (tapi tak bayar worker) palace and a new (and I thought the current one sudah mencukupi) parliment building. But the government telling us to live within our means? Heh.


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