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Suvi Lindén (cons), the Finnish transport minister, announced Thursday she would not carry forward the government's plan to replace the licence fee with a tax, citing a lack of backing in Parliament.
The minister said the matter would be postponed to the next legislative period, meaning after next year's general election.
The government had planned to fund the Finnish Broadcasting Company (YLE) with a lump-sum tax it prefers to call the media fee.
The tax would have been levied from all households regardless of television or radio ownership.
Ms Lindén added the government had also shelved its plans to create an independent organ to oversee the public broadcaster.
Mikael Jungner, YLE's outgoing director-general, said he was surprised by Ms Lindén's decision to put the YLE fee on the backburner and slammed the move as "irresponsible ownership policy".
He added that the decision put the public broadcaster in a situation where it was really difficult to plan for the future.
Mika Lintilä, a Centre party MP who led a working group that came up with the YLE fee, also expressed surprise.
He pointed out that the working group had submitted a unanimous proposal.
Eero Heinäluoma, the chairman of the Social Democratic party's parliamentary group, said that while the SDP was prepared to resume talks about YLE's administrative structure he remained opposed to the government's plan to found an independent public broadcasting oversight body.
STT
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