The source told FMT the department had been receiving RM60 million annually.
The department, better known under its Malay acronym of Jasa, has been accused by critics of being a propaganda unit used by the Barisan Nasional government to attack opposition leaders.
It operates within the communications and multimedia ministry.
Yesterday, Prime Minister Dr Mahathir Mohamad announced that Jasa was among several agencies deemed to be “political” that will be abolished.
The 2018 budget allocated RM30 million to Jasa, up from RM22.9 million in 2017, as part of an enlarged RM603 million allocation to the communications and multimedia ministry for this year.
Former deputy minister in the ministry Johari Jailani had told parliament that Jasa needed a bigger allocation to pay the salaries of 177 contract staff who were absorbed into the permanent service.
He had said these staff had served for “more than 15 years”.
Johari was responding to the then Permatang Pauh MP Dr Wan Azizah Wan Ismail who said Jasa had an unreasonable wage budget of RM12.8 million to pay its 272 staff.
Wan Azizah, who is now Deputy Prime Minister in the Pakatan Harapan government, said it was incredulous that the Jasa director-general was paid more than RM20,000 in wages whereas the communications and multimedia minister received just over RM14,000.
The last Jasa director-general, Mohd Puad Zarkashi, quit the post last month after he was not offered a seat to contest in the general election. He is Umno Batu Pahat division chief.
Yesterday, Jasa’s strategic communications director Tun Faisal Ismail Aziz said it was unfair to axe his department and put 1,100 people out of a job.
He said the department played an important role in serving the government of the day and not all its staff were political appointees.