Table of contents

1.0 Introduction to local government in Malaysia

1.1 Definitions
1.2 Features/Characteristics of local government
1.3 Objectives of local government
1.4 Functions of Local government
1.5 Criteria to determining the size and boundary of local authority
2.0 History of local government Malaysia
2.1 Important events in the History of Local government Malaysia
3.0 Local Government Laws
3.2 Practice in Malaysia
4.0 Relationship between Local government, state government and federal government
4.1 Relationship between Local government and Federal government
4.2 National Council of Local Government (NCLG)
4.3 Ministry of Housing and Local government (MHLG)
4.4 Relationship between Local government and state government
5.0 Representatives in Local Government
5.1 Definitions and Roles of Councilors
5.2 Types of Representatives
5.3 History of Local Government Election
5.4 Practice of Representatives in Malaysia

6.0 Malaysia local government personnel system

6.1 Definitions
6.2 Types of personnel system
7.0 Financial Administration
7.1 Introduction
7.2 Financial Sources of Local government Malaysia
7.3 Financial problems Faced by Local government
7.4 Ways to overcome the problems
8.0 Conclusion
8.1 Introduction
8.2 The impacts of urbanization on local authorities
8.3 Overcoming the challenges of urbanization by local authorities
Bibliography

1.0 Introduction to Local Government Malaysia

Local government or local authority, or pihak berkuasa tempatan, is the
lowest level in the hierarchy of governance in Malaysia. There are two other
branches of government in Malaysia namely, Federal and State. The position
of local governments in Malaysia is stated in the Federal Constitution
whereby Local government outside the Federal Territories of Kuala Lumpur,
Labuan and Putrajaya is mentioned under the State List in the Ninth
Schedule of Federal Constitution. This gives the State government the full
authority to govern the local authorities outside the Federal Territories of
Kuala Lumpur, Labuan and Putrajaya.
1.1 Definitions
Local government can be defined as follows:
An administrative body for a small geographic area, such as a city, town,
county, or state. A local government will typically only have control over their
specific geographical region, and cannot pass or enforce laws that will affect
a wider area. Local governments can elect officials, enact taxes, and do
many other things that a national government would do, just on a smaller
scale.
In Malaysian context, report by the Royal Commission of Inquiry, local
government is defined as follows:
a) Representing the third tier in federal structure
b) Administered by state nominated councilors
c) Geographically encompassing a portion of the country
d) It is infra-sovereign
e) Subordinate and subject to the control of the state ( Limited of financial
and administrative issues)

f) It is a separate legal unit/ entity from higher government or other local

authorities
g) Has power to sue and be sued
h) Provide obligatory and discretionary to provide goods and services
1.2 Characteristics of Local Government
According to Phang Siew Nooi, the local government in Malaysia has the
following characteristics:
1. Local government has its own territory according to the law.
2. Responsible of developing the given area and welfare of the people
3. It is an institution under special laws controlled by superior governments
4. Can be sued, can sue, have properties and can sign agreements
5. It is infra-sovereign, eligible to the local law.
6. Independent body
7. Representatives are elected by local people or appointed by higher
authority
8. Yang Di Pertua (YDP) works with council members elected by State
government
9. Responsible in maintenance such as cleaning, health services and security
10. Have powers to impose tax penalty, appoint staff and autonomy in terms
of financial administrative body.
1.3 Objectives of local government
1. Maintain the national unity by conducting programs for the people to take
part in local affairs and activities

2. Local government can promote democracy concept of the state in local

level through decentralization
3. The scope of autonomy of freedom of local government in Malaysia

Financial: Can impose tax, collect, maintain and spend revenue

Administration: Appoint and terminate their staff

4. Effectiveness and efficiency of the administration in fulfilling the demands

and needs of people
5. Responsible in social and economic development according to the Local
government act 1976
1.4 Functions of local government
Local government of Malaysias functions depends on the following subjects:
i) Environment
Focus on road service, traffic control, lamppost, recreational park, proper
draining and culvert system etc
ii) Social
Maintenance, garbage collection, industrial sewerage, sanitation, etc.
Provide education facilities, health awareness programs, build shelter for
handicap people and senior citizens
iii) Public Service
Planning and building recreational halls and spaces for the community. These
buildings are considered as assets of the council, whereupon fees are
collected to enhance the services of the buildings
iv) Security
Focuses on Police stations, fire stations etc...

1.6 Criteria determining the size and boundary of local authority

1. From district council to municipal council
i) The annual income should be more than 10 million
ii) Population should be more than 100,000 people
iii) Infrastructure should be completed
iv) They must have control over the administration
v) Can manage own financial matters
2. From municipal council to city council
i) The annual income must be more than 80 million
ii) Population should be more than 300,000 people
iii) Infrastructure should be systematic, organized and completed
v) Have an infrastructure, population, political interference and income
3. Normal area to district area
i) Based on state government opinion and view
ii) Place to be upgraded is a district or not
iii) Area is outside the town centre
iv) Population must be less than 100,000 people
v) Annual income should be less than 5 million
Table 1, Types and size of local authorities
Types
City Councils
Municipal

Number
10
34

Largest
1400000
4480000

Smallest
152310
230000

Councils
District Council
Total

101
145

162180

80000

Source: Ministry of Housing and Local Government (MHLG), 2006

2.0 History of Local government in Malaysia
The evolution of the present local government Malaysia dates back to the
colonial period by the British. It underwent chronological changes during the
pre-independence, time of independence and post-independence period.
Historical timeline says, the oldest local government systems existed in
Penang and Malacca. The development of local government started from the
year 1801 until the Royal Commission by Dato Athi Nahapan came into
existence. Since then, it has become a fully-fledged system established in
Malaysia.
2.1 Below are some of the important events in the history of local
government in Malaysia:

1801
o The first elements of Local Government were established in
Penang with the appointment of a Committee of Assessors.

1857
o A more solid Local Government was established in Penang and
Malacca. The Local Government status of power was confirmed

by Straits Settlement Municipal Ordinance133/1913.

1893
o Ipoh City Council was established.
1897
o Seremban Municipal Council was established in 1897 as the
Health Board providing only basic amenities to the Seremban
dwellers. After the Second World War, Seremban grew rapidly
and the Health Board was replaced by the Seremban Town Board
until 1965

1907
o Sanitary Board was form in Kelantan. By the year 1914, Kota
Bharu, Tumpat and Pasir Mas was under the authority of the
Sanitary Board.

1910
o Johor Bharu Town Board was established.
1929
o Local Government Act was established by the British in Malaya
1931
o Local Government in Jesselton, Sandakan, Tawau and Labuan was
formed. It was then known as Sanitary Boards.

1938
o Municipal Enactment was formed and Kota Bahru Town Board
was established.

1948
o Local Authorities Ordinance 1948 was formed under the British
rule in Sarawak
1950
o Local Government Election Ordinance 1950 that entrusted the
local councils to organize elections for the office of the
councillorsthe people that governs local area.

1952
o The Local Government Ordinance 1952 was established, which
empowered local residents to establish local councils in their
area wherever necessary.

1957
o Independence for Malaya. All Local Government control was
given to the State Government to be administered.
1965
o The Malaysian Royal Commission was formed to investigate the
Local Government system. It was decided that all Local
Government Elections to be abolished on 2nd March 1965.

1971
o The Royal Commission on Remuneration and Conditions of
Service in Local Authorities and Statutory Authorities, more
conveniently described as the Harun Commission, was eventually

appointed on June 10, 1971 and submitted its report on local

authorities in December 1972

1972
o By July, all local government elections had been entirely
abolished in Malaysia.

1973
o A temporary provision of the Local Government Act was
implemented.

1976
o The Local Government Act was finalized. The Local Government
Act, 1976 empowers state governments to integrate old local
authorities and, thus, create a new local authority large enough
to make it an effective unit from both the administrative and
financial perspective.

3.0 Local Government Laws

The Local government act of 1976 provides local authorities in Malaysia with
a very comprehensive set of functions and responsibilities. The two other
main laws, Town and country planning act (1976) and the street, drainage
and building act (1974) help the local government to perform their functions
under the 1976 act.
These acts help in reinforcing the local authorities with the developmental
functions in the field of urban management and play an important role in
national development.
As Mohamed Afandi (1989:25) notes:
"Under the provision of the related local government laws (..) Local
authorities may carry out a whole range of functions, limited only by their
own ambitions and resources". The major functions of Malay local authorities
can be summarized as environmental public, social and developmental.
3.1 Practice in Malaysia

Local government act 1976 (171 Act) act as the legal framework in practicing
the local government in Malaysia.
Prior to the restructuring exercise and adoption of Local government act
1976 (171), the types of local authorities are as follows:
a) City Hall
b) City Council
c) Municipal Council
Table 2 Distribution of Local Authorities
State/Territ
ories
Johor
Kedah
Kelantan
Labuan
Melaka
Negeri
Sembilan
Pahang
Perak
Perlis
Penang
Putrajaya
Selangor
Terengganu
Sarawak
Sabah
Kuala Lumpur
Total

Cities
1
1
1

2
2
1
1
10

Municipaliti
es

State/Territ
Districts

ories
Population

4
3
1

9
7
11

1314900
7871
634100

858900

2
4
1
2

9
10

6
2
3
2

5
5
20
19

34

101

1290000
1209700
204500
1307600
26713
4175000
899000
2071800
2656400
1379300
23300684

Source Ministry of Housing Local Government (MHLG), 2006

The act classifies local authority into two groups: Municipality for large towns

and district council for small urban centre.

Under section 5 of the act, a local authority is the local planning authority
that approves and controls all planning and development in that area.
The Street drainage and Building Act 1974 is a Federal law that prescribes
the procedure for controlling building development and ensures the building
complies to all requirements as follows:
a) Proper access to the building
b) Possess roads and lanes where necessary
c) Traffic circulation and car parks
d) Proper system for sewerage and wastewater disposal
e) Proper drainage system
4.0 Relationship between Local government, state government and
federal government
4.1 Relationship between Local government and Federal
government
o The federal government has certain powers through the National
Council for Local Governance which is considered the most powerful
of the local government; the federal government can control the
decisions taken by local government.
4.2

National Council of Local Government (NCLG)

o The National Council for Local Government, which is responsible for

the coordination of the work of local councils, municipalities, city
councils, and the call to the meetings of the local authorities, and to
take decisions binding of both the state government and the federal
government .

4.3

Ministry of Housing and Local government (MHLG)

o Is a federal ministry, given the task to co-ordinate the local

governments in respect of legal and policy standardization as well
as co-coordinating the channeling of funds from the federal
government.
4.4 Relationship between Local government and state
government
o The state government is responsible for the local government to a
large extent. It oversees the work of all the local government and its
decisions State government is responsible for giving instructions to
local government.
5.0 Representatives in Local Government
It has the power to gather taxes (within form of assessment tax), to create
laws and rules (in the form of by-laws) and to grant licenses and allow for
any trade in its region of jurisdiction, further to providing simple amenities,
collecting and managing waste and rubbish as well as planning and
.developing the area beneath its jurisdiction
5.1 Definitions and Roles of Councilors
In certain countries, the representative is taken into consideration as a main
function
whereby their council individuals of Local Government had been chosen on
through the
general elections. Representative may be defined as a person who is
responsible
to guide or represent others in certain subjects that need to be settled
5.2 Types of Representatives

Relationship: Closer to higher power.

Decision making: Fast choice making cause they gain assist from the

authority.
Cost: Save cost.
Favorable: Favorite of local authority.
Time constraint: Save time cause no requirement for election process.
Professionalism: More specialists in his / her field. More involvement in

local government sector.

Interest: Determine the needs of local authority and advancement as

whole.
Familiarization: Not generally acquainted with the area.

5.3 History of Local Government Election

Elections in Malaysia exist at two sections: federal level and state level.
Federal level elections are those for participation in the Dewan Rakyat, the
lower place of Parliament, while state level elections are for enrollment in the
other State Legislative Assemblies. The heads of official branch in both the
government and state levels, the Prime Minister and Menteri Besar/Chief
Ministers individually, are indirectly elected, typically filled by an individual of
the dominant party/coalition in the particular legislatures
While any state may break down its gathering autonomously of the Federal
Parliament, the conventional practice is for most state assemblies to be
dissolved at the same time as Parliament, except for Sabah and Sarawak, in
spite of the fact that these two states had held elections at the same time
with the rest of the country, as it is the situation for Sabah in the 2004, 2008
.and 2013 elections, and Sarawak in the 1969 and 1974 elections
5.4 Practice of Representatives in Malaysia
Malaysia practices a board of trustees system whereby the committee
.members are selected

Characteristics of the committee

1. Generally, the board is a body whereby the errands can be referenced to

from the other party and the board must be competent in actualizing their
tasks.The other party is the government, state official, local individuals, and
other department.
2. The board of trustees held obligation towards the body, which has
established them and has given then authority or power.
3. The status of the board of trustees is relying upon the body, which has
framed them.
4. The committee can be framed in different sorts.
5. The committee can likewise go about as a counselor.
6. The committee can be framed because of specific reasons temporary form
until the case settled it implies that the advisory group can be disintegrated /
abrogated once the case being settled.
7. The committees are framed to execute several assignments, which are
identified with the association
8. The aggregate numbers of advisory group are contrasting between the
board. The larger size of board, larger number of advisory group will be set
up.
6.0 Malaysia Local government personnel system
Every local authority is given the power to recruit personnel to carry out its functions. Local
autthorities have discretionary to appoint their own staff, exercise, control and execute
disciplinary action and undertake personnel functions as long as the State government gives their
approval.
A system which is established by an organization in administrating the process of selecting,
recruiting, training, motivating, directing and co-coordinating workers is the function of a
personnel system.
As a result of the implementation of local government reform:

Local councils are appointed by State authorities

Chief executives, i.e. mayor for a city council, Yang di pertua (YDP) for municipal and
District officer (DO) for district councils are appointed by State authorities

City of Kuala Lumpur is headed by Commissioner of the City Kuala Lumpur

The appointment of council members must not be less than 8 and not more than 24. Similarly, a
president is also appointed for the full council of a local authority.
Local authority posts in Malaysia can be divided into:

Permanent and pension

Permanent and non-pension

Temporary and contract posts

Local authority is responsible to appoint, confirm, decide, transfer and exercise disciplinary
control over members working in their service and the promotion board conducts all the
promotions based on merit.
6.2 Types of Personnel System
a) Separate / close personnel system
b) United personnel system
c) Integrated personnel system
Early 1981, Federal government and state government agreed that the functions have to be
controlled by the Federal government agencies, Public Service Department (PSD). Therefore,
scheme of service grades for the local government personnel is done by PSD only, the legislated
scheme must be accepted and Local government can claim it as their own scheme later onwards.
Public Service department through it's training division and the national institute of public
administration (INTAN), is responsible for planning and conducting training programs for public
sector personnel including those from the local government sector.

As part of the continuing efforts to produce local government personnel of higher caliber, many
local authorities throughout Malaysia have adopted a number of internal as well as external
training strategies.
Individual local authorities recruit their own staff and have power to discipline and dismiss them
as necessary. In some cases there is deployment of civil service staffs appointed as mayors to
local government. Each council is required to have an executive mayor as chief executive officer.
.0 Financial Sources of Local Government in Malaysia
Malaysian local government expenditure is based n two factors:

Development expenditure
Large sum of money spent on construction etc
Operating expenditure
Money spent on short lived items such as maintenance

Local government revenue can be obtained from 2 sources:

Land based Revenue - tax, fine, charge parking, rental

Non-Land Based Source of revenue- Apply for loan with the approval
of state government

The sources of revenue are collected based on section 30 Local government

act (171) 1976 as follows:
1. All taxes, rentals, licenses payment and chargers that are paid to the
Local Authority based on Local government act (171) 1976
2. All charges or profit that is gained from any trading services or
development that is done by the LA under their authorities
3. All interest on every investment that are made by the local authority
and all revenue that is gained from the property or vice-versa of the
Local authority
4. All revenue that are occurred to the local authority from the federal
government or other state government or from any bodies or from
other sources such as contributions, endorsements and so on.
7.2 Sources of Income

The Ministry of Housing and Local government, classifies the sources of

income into the local authorities into 6 groups, namely

Assessment rates ( inclusive of contribution in-lieu-of rates)

Licenses
Rentals
Government grants (inclusive of road grants)
Car parking charges, planning fees, compounds, fines and interest
Loans (from government and/or financial institutions)

7.3 Financial problems faced by Local government

1.
2.
3.
4.
5.
6.

Lack of financial/resources
Less of development in the area
Poor Management
Status of the Local government
Lack of skills and manpower
Difficulty in applying for loan

7.4 Ways to overcome the problems

Increase the assessment rate

Efficient in collection, on time
Exercising the revaluation properties periodically (3-5 years)
Government can increase the salary, come up with new rate of

charge
Provide better public utilities for the growing population
Local government must be alert when there is an over expand in

construction activities, increase charge

Approve more licenses and permit less rigid procedures
Create more parking slots and ensure parking places are secured
Compound, fines and notices (increase fee/impose higher fine/

implement strict regulations)

Interest and investment earnings must depend upon the capability

of local government itself

Expand the economy and solve property crisis.
Privatization
o The act of reducing the roll of government or increasing the role
of the private sector in an activity as for the local government

can privatize into 2:

a) Local government service (sanitation system)

Indah water consortium

b) Local government projects (Recreation park)
Re-zoning, change the status of the land usage
Land polling (combining land for profitable development)

8.0 Conclusion
By the year 2020, Malaysia will be a fully developed country; therefore it is a
challenge for the local government authorities to overcome the problems
faced due to urbanization.
Urbanization is defined as the social process whereby city grows and
societies become more urban.
The process of urbanization has affected lives of people and has a great
impact on the local authorities.
8.1 Impacts of urbanization on local authorities

Improvements and upgrading facilities creates problems to local

authorities especially it affects roads and other infrastructure

Increased vandalism on public properties
Increased number of illegal squatters
Increased crimes and felonies
Increased demand for quality life
Spread of contagious diseases

8.2 Overcome the challenges of urbanization by Local authorities

Work with people approach helps to create a friendly environment

Safe city initiative helps to fight crime and felonies in the city
Healthy city concept improves the quality of life in any setting
Urban poverty eradication program
o Under ninth Malaysia plan, the government through Ministry of
housing and local government launched this program to improve
the quality of life and to reduce the challenges faced to the poor

people in urban settings due to rapid urbanization

Bibliography
"Constitution of Malaysia, 1957." Commonwealth Legal Information Institute. N.p.,
n.d. Web. 29 Nov. 2015. <http%3A%2F%2Fwww.commonlii.org%2Fmy%2Flegis
%2Fconst%2F1957%2F24.html>.
"Local Government in Malaysia." Wikipedia. Wikimedia Foundation, 7 Nov. 2015.
Web. 28 Nov. 2015. <https://en.wikipedia.org/wiki/Local_government_in_Malaysia>.
"What Is Local Government? Definition and Meaning." BusinessDictionary.com. N.p.,
n.d. Web. 28 Nov. 2015. <http://www.businessdictionary.com/definition/localgovernment.html>.

"Introduction to Local Government Malaysia." (n.d.): 1-109. Web. 29 Nov. 2015.

<http://lib.kedah.uitm.edu.my/psblibrary/notes/am110/layout/subject
%20material/handouts/dpa/PAD%20320/h1.pdf>.
"Elections in Malaysia." Wikipedia. Wikimedia Foundation, 4 Nov. 2015. Web. 28 Nov.
2015.
<https://en.wikipedia.org/wiki/Elections_in_Malaysia#Local_government_elections>.
"Malaysia." Wikipedia. Wikimedia Foundation, 22 Nov. 2015. Web. 28 Nov. 2015.
<https://en.wikipedia.org/wiki/Malaysia>.
"Local Government." N.p., n.d. Web. 29 Nov. 2015.
<https://web.archive.org/web/20150715143710/http://jkt.kpkt.gov.my/english.php/p
ages/view/12>.