Could income averaging skew poverty data?

Question

Accepted Answer

Average Household Income Projections May Be Skewed by Inclusion of Extreme Income Groups

Datuk Seri Anwar Ibrahim has raised concerns that projections for average household income may be inaccurate if the calculation includes both billionaires and the hardcore poor. He suggested that the Economic Planning Unit should instead provide granular data on the situation of the hardcore poor, rather than relying on a blanket summary. This approach, he argued, would offer a more realistic picture of the nation's economic landscape.
Concerns Over Realistic Income Targets

Anwar questioned the feasibility of the 12th Malaysian Plan's (12MP) target to raise average household income to RM10,000 by 2025. He highlighted the current global economic scenario, including the impact of Covid-19, rising retrenchment rates, and anticipated slow development over the next one to two years, as factors that make such a statement potentially unrealistic. His scepticism is further fueled by Employees Provident Fund data showing that 46 per cent of contributors over 55 have less than RM10,000 in savings, raising doubts about their ability to significantly increase income in the near future.
Methodology of Averaging Income

The Leader of the Opposition proposed that averaging household income can lead to skewed and inaccurate figures. He explained that including individuals at the extreme ends of the income spectrum—billionaires at the top and the hardcore poor at the bottom—within the same calculation can distort the overall representation of the average household's financial standing. This practice, he believes, masks the true economic conditions faced by a significant portion of the population.
Call for Granular Poverty Data

Instead of a broad summary, Anwar advocated for the Economic Planning Unit to present a more detailed and specific breakdown of the hardcore poor's circumstances. He suggested that highlighting the actual situation granularly would provide a clearer and more accurate understanding of poverty levels and the challenges faced by vulnerable households. This approach would allow for more targeted interventions and policy development.
Effectiveness of Past Policies Questioned

Anwar also pointed to the inclusion of districts from oil-producing states among the poorest under the 12MP. He questioned the effectiveness of previous policies and the performance of representatives in these regions, particularly in Kelantan, Sarawak, and several districts in Sabah. This situation, he argued, raises concerns about potential carelessness, neglect in program implementation, or failures at both federal and state government levels.

Reading history

Hide →

This history is cleared when the page is closed.

Could income averaging skew poverty data?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends