- During the 19th and 20th century under Residential System, the Federated Malay States were administered separately and independently by their respective Malay Rulers.
- Each state had its own rules and regulations.
- The role of the Residents was mainly advisory in nature.
- The financial administration was conducted through the Bendahara.
- Penghulu or village head man and other natives chiefs were responsible for the collection of revenue.
- Requests for allocations of expenditure were submitted by the Residents to the Governor of The Straits Settlements for sanction.
- Budgetary report was then sent to the Crown Colony Office in India.
- With the transfer of Crown Colony Office to London in 1867, financial statements were sent to London for publication as an annual report in Parliamentary papers.
- As the country progressed towards becoming a modern economy at the end of 19th century, the fragmented state of affairs was found to be uneconomical and inefficient to manage.
- Federal Council Agreement was signed on the 25th October 1909 to led the formation of the Federal Council of the Federated Malay States, under which the states of Pahang, Perak, Selangor and Negeri Sembilan were administered by central body.
- Members of the Federal Council were:
- High Commissioner (President)
- Resident General (Alternate President)
- 4 Malay Rulers and their Residents
- 4 unofficial members who were nominated by the High Commissioner
- The first Financial Commissioner was Henry George Bagnall Vane who was appointed in 1909 until 1915.
The Development Of Treasury Malaysia
Year 1950 – Current
- As a step forward to fully integrate and centralize the financial administration of all the states, Treasury Circular No.15 of 1951 was issued.
- The circular defined the role and functions of the Federal Treasury including the Secretary to the Treasury and the Financial Treasury which is established as the department that controlled and exercised powers on all matters regarding revenue collection and expenditure.
- Now, The Federal Treasury as a central agency is entrusted with the country’s financial management and economic development.
- The mandate is carried out in collaboration with The Prime Minister Department, specifically The Economic Planning Unit (EPU) and the other ministries as well as Bank Negara Malaysia.
- The collaboration helped the Government to restructure the country's economy which is always influenced by the international financial situation.
- In the early establishment of the Treasury, five (5) sections have been created and one of them is the Commercial Division.
- In the mid-year 1950s, trading and commercial activities increased rapidly and it was soon apparent that the Trade Division was not able to handle the volume of works.
- The Ministry Of Commerce and Industry was thus established in 1956 to take over the trade and commerce related function of the Treasury.
- Demand for valuation services gradually increased.
- The Valuation Unit was formed in 1957 to carry out the work that was previously outsourced to the private sector.
- The move resulted in substantial savings for the government.
- In 1959s, the Central Bank was established to cater to the needs of increasing international transactions arising from trade and commerce as well as to facilitate borrowings from abroad to develop the country’s agriculture and social sectors.
- In the 1960s, a number of new divisions and units were formed.
- They were established to augment the capacity of the country to formulate appropriate fiscal and monetary policies to meet national economic and social objectives.
- The financial system was further streamlined with the establishment the Federal Finance Department in Sabah and Sarawak.
- To help Bumiputra participation in the economy, the Contract And Supply Division of the Treasury was tasked to bring them into the mainstream of business and commerce with the establishment of the Bumiputra Participation Unit.
- In line with the new tasks and responsibilities, the structure of the Federal Treasury underwent progressive changes.
- The government began to set up some statutory bodies as a trigger in the development of the states that involve the participation of Bumiputra such as PERNAS, UDA, Regional and State Economic Development Corporations.
- Housing Loan Division was established to provide housing loans and were made available to all government employees for purchasing their own.
- The Treasury was restructured under three (3) sectors, namely Finance and Administration, Revenue and Planning, and Budget.
- The restructuring was to strengthen the use of budget as a strategic management tool.
- This led to the review of the PPBS and the introduction of the Modified Budgeting System (MBS) in the late of 1980s.
- In the 1985, the Capital Issues Committee (CIC) was elevated to become a unit to administer the implementation of the Securities Industry Act and to ensure the orderly development of the capital market.
- In 1988, the Insurance Administration Division was transferred to Bank Negara.
- Malaysian economy grew rapidly as the result of convergence of a number of positive factors.
- Two major institutions were established, the Securities Commission in 1993 and Khazanah National in 1995.
- In late 1990s, economic performance suffered following the Asian Financial Crisis in 1997.
- Many banks and enterprises were saddled with non-performance loans (NPLs) and debt burden.
- Again the Treasury responded quickly to the problems by establishing the Danaharta, Danamodal and Corporate Debt Restructuring Committee (CDRC).
- In tandem with new economy realities which have become more challenging, complex and daunting.
- The Treasury was restructured into three (3) sectors namely Policy, Operations and Systems and Controls which in turn focused on the strategic, operational and development aspects of management respectively.
- The reorganization was aimed at providing more focused and effective response to issues and concerns emerging from time to time.
- The development and economic progress has made the role of Treasury to become more efficient and began to act as a strategic advisor involving financial functions of the country.
- Treasury Transformation Programme (TTP) was first introduced by Tan Sri Dr Mohd Irwan Serigar, Secretary General of Treasury and launched in January 2013 in line with National Transformation Agenda, set by YAB Dato' Sri Najib Tun Razak in 2010 through the Government Transformation Programme (GTP).
- To remain relevant in Malaysia and globally, “Tomorrow’s Treasury Today” has to define its core responsibilities and have the right people in the right places with the right information.
- After the transformation was implemented, Treasury organizational structure had been improved by adding another two (2) new divisions which is The International and Statutory Bodies Management Division.
Y.B TUN ABDULLAH BIN HJ. AHMAD BADAWI
2003 - 2008
Y.B TUN MAHATHIR BIN MOHAMAD
2001 - 2003
Y.B TUN MAHATHIR BIN MOHAMAD
1998 - 1999
Y.B. DATUK SERI ANWAR BIN IBRAHIM
1991 - 1998
Y.A.B. TUN HUSSEIN BIN ONN
1974 - 1976
Y.BHG. TAN SRI DATO' SRI DR WAN ABD AZIZ BIN WAN ABDULLAH
2007 - 2012
Y.BHG. TAN SRI DATO' OTHMAN BIN RIJAL
2000 - 2004
Y.BHG. TAN SRI DATUK DR. ARIS BIN OTHMAN @ OSMAN
1997 - 1999
Y.BHG. TAN SRI ABDULLAH BIN AYUB
1979 - 1985
Y.B.M RAJA TUN MOHAR BIN RAJA BADIOZAMAN
1971 - 1972