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(generated from captions) a country is a belief that we should create every day of my political life, personally, The one thing that motivates me and goes into campaign mode. the Queen to dissolve parliament Prime Minister Tony Blair asks A May 5 election for Britain. Tonight -

historic third term for Mr Blair - Most observers are predicting an has been under way for some time. But the unofficial battle of official campaigning. That leaves just four weeks go to the polls on the 5th of May. has just announced the country will Tony Blair, The British Prime Minister, of another rate rise. the pros and cons And the Reserve's judgment - by a policeman. after a man is shot dead Anger in the streets of Melbourne mission to Indonesia. killed on the earthquake-relief honours for the nine Australians The sad return home - But first, our other headlines. That's coming up. John Rentoul. to speak to Tony Blair's biographer, and we'll cross live to London later in the program, More on the Crosby connection strategist, Lynton Crosby. and Michael Howard's current former campaign director is John Howard's for the similarities in style the credit and the blame The man picking up and under what circumstances. who comes to this country We will decide has used effectively in the past. Australian counterpart, John Howard, issues the Conservative leader's and immigration - rhetoric on asylum seekers That move follows his earlier the Human Rights Act. even if it means scrapping to stop illegal gypsy camps, Michael Howard has pledged KIRSTEN AIKEN: namesake. from his vastly more successful who's been taking political cues Conservative leader Michael Howard, Tony Blair's opponent is the I'm Tony Jones. Welcome to Lateline. Good evening. This program is captioned live. in the latest polls. with Conservatives just behind Labor on his hands, But he has a real fight to make the most of themselves. they get the chance or race, or colour, or religion, or background, where regardless of someone's class,

we are growing better, we have The British economy is growing. And blessed with a booming economy. one major problem - Tony Blair is that's taken a stand. But they have conservative, to support a party promises or they can vote Blair for eight years of broken Labour. They can either reward Mr just a couple of points behind heartened by new polls which put him heartened by new polls which put leader, Michael Howard, will be put the conservatives in. That party put the conservatives in. That think there's any great desire to certain extent about him but I don't certain extent about him but I disgruntlement, resentment to a so you know, there's a feeling of slightly slippery sort of character, unpopular. Many people see him as a lot of people. The Iraq war was very lot of people. The Iraq war was this time around. He's offended a he certainly has his image problems Minister is largely immune from. But Minister is largely immune from. affliction the mercurial Prime mouth disease. Foot in mouth an election was delayed by foot and Pope's funeral. Last time the hours to avoid a clash with the wedding day had to be shifted by 24 princess-to-be, Camilla. Their moment was Prince Charles and his remember the Pope. Sharing that cathedral for a special service to and wife Cherie were at Westminster Queen yesterday, the Prime Minister Instead of taends biscuits with the came a day later than planned. make the most of themselves. It all religion, they get the chance to background or race or colour or regardless of someone's class or should create a country where should create a kun political life, a belief that we personally, every day of my The one thing that motivates me worst kept political secret. to request an election was Britain's to request an election was Blair's visit to Buckingham Palace Down the Mall and into history. Tony Down the Mall and into history. from London. as Philip Williams reports within striking distance, put the opposition Conservatives But the latest opinion polls a first for Britain's Labour Party.

Flight Lieutenant Lyn Rowbottom, Lieutenant Matthew Goodall, Those killed were - came a sprig of wattle. Michael Jeffrey, From the Governor-General, on each of the caskets. a medal of valour, highest honours, placed one of his nation's Susilo Bambang Yudhoyono, the Indonesian President, Flanked by the Prime Minister, The families of the dead looked on. before reaching the waiting hearses. through a military guard of honour, it was as the nine caskets passed Operation sa*p sad Return, and sad The defence force dubbed it Samantha Hawley reports. paused to remember their colleagues. which is still in Indonesian waters, crew of HMAS 'Kanimbla', At the same time, the 300-strong from Sumatra. after a 24-hour flight this afternoon, touched down at Sydney airport carrying the bodies A Hercules aircraft on the Indonesian island of Nias. helicopter disaster who died in the Sea King for the bodies of nine Australians homecoming today There was an emotional the rebels on his own Labour Party. exposure to his most fierce critics, and that would give Tony Blair more happy with a swing of 40 or 50 seats happy with a swing of 40 or 50 the conservatives would probably be victory really is beyond them, then hitch seat majority. If election is to take a big bite out of his 161 is to take a big bite out of his best the conservatives can hope for change of government. It appears the change of government. It appears there seems little appetite for a but he's not my cup of tea. But people will say the exact opposite a bit smarmy. I'm sure loads of Blair's image. He's a bit slimey and Blair's image. He's a bit slimey Kelly did nothing to improve Tony suicide of weapons inspector David weapons of mass destruction and the dodgy dossier, the disappearing against Britain's involvement the over Iraq. A million people rallied Minister did lose a lot of support being run by Mr Blair? The Prime government when there's already one would elect a conservative Germany. Besides, many would argue, across the channel, like France or unemployment than our neighbours we are growing better, we have lower

the chief of the Defence Force, Peter Cosgrove, the caskets weren't distinguished by rank or age. They were considered equals united in death and their families united in grief. Father of all mercies and giver of all comfort. Dear, graciously, we pray, with those who mourn the sudden deaths of their precious loved ones. The nine Australians died when their Sea King helicopter crashed during an assistance mission on the earthquake-devastated Indonesian island of Nias. They were also honoured today by their crew mates aboard HMAS 'Kanimbla', still in waters off western Sumatra. The two survivors of the crash have now returned to Australia to recuperate. With the bodies of the dead now home, the Defence Force can expect questions about what went wrong to intensify. The Navy At the direction of and Leading Seaman Scott Bennett. Petty Officer Stephen Slattery Lieutenant Paul Kimlin, Squadron Leader Paul McCarthy, Navy pilot Lieutenant Jonathon King, Lieutenant Matthew Davey, Air Force Sergeant Wendy Jones, has already grounded its 30-year-old fleet of Sea King helicopters, with three separate investigations into the crash under way. The bodies of the dead are now in the hands of the New South Wales coroner. Funeral details are yet to be finalised. Samantha Hawley, Lateline. Pilgrims are continuing to flock to Rome from around the world to pay their last respects to Pope John Paul II. The Pope's embalmed body is now lying in state in St Peter's Basilica. More than half a million people are waiting up to seven hours to view the body, braving queues stretching back more than 1.5 kilometre into the streets of Rome. The majority of them are young people. Bus loads of people who are handicapped. It's a deeply moving tribute to a great man of God. The Pope's funeral has been set down for this Friday. 200 world leaders are expected to attend the ceremony, including the Australian Governor-General, Michael Jeffery. Victorian police are facing three separate inquiries tonight into why heavily armed officers shot a man dead in Melbourne's west. The man was suspected of attempted murder, and was gunned down during a raid on a house in Brooklyn. Police are saying little about the circumstances of the shooting, but civil libertarians have accused police of excessive force. Anne Barker reports. (screaming) Distraught relatives of the dead man sobbed and screamed when they learned of the police shooting. Their anger and grief spilled onto the footpath outside and threatened to turn violent. Police even tackled the man's uncle to the ground to restrain him. He's got everything to defend himself. They shot him because they could. Emotional family members shouted obscenities at police and the man's uncle vowed to get even. The 29-year-old victim, Mohammed Chaouk, was shot in the neck in an upstairs bedroom just after 6am when police from the Special Operations Group stormed this house in suburban Brooklyn. Our intelligence and a risk assessment conducted indicated that it was appropriate for the SOG to be involved in this search. a firearm was discharged by a member of the SOG and a suspect has been fatally wounded. It was one of several raids connected to a police investigation codenamed Operation Vapor into organised crime. A few kilometres away, two other men were arrested and cars were seized in a separate raid. It has involved several people and serious criminal offences, the most serious being an attempted murder which involved a shooting. Police say the dead man was suspected over an attempted murder. It's unclear whether he was armed or threatened police, but SOG officers took two swords and some marijuana from the house. But his relatives say he didn't deserve to die. He's a family man. He died for the wrong reasons. What'd he die for? Why'd they shoot him? It's the second fatal police shooting in Victoria this year and the fifth in two years. While police say their actions were fully justified, civil libertarians are demanding to know why such lethal force was needed. The number of deaths that's now occurred and the fact that it seems be increasing in frequency is a real concern. Three separate investigations have now begun - by the coroner, the Homicide Squad and the Ethical Standards Department. But Liberty Victoria says that only an inquiry independent of police will suffice. The coroner will investigate, is independent, but who will be the coroner's eyes and ears? Our concern is it will be other police. This evening, three of the dead man's relatives and an associate appeared in a Melbourne court charged with various crimes, including drug offences. Anne Barker, Lateline. Back now to our top story. With Tony Blair announcing this evening that a general election will be held in the UK on 5 May, much is being made of the similarities between Conservative leader Michael Howard and his Australian namesake, Prime Minister John Howard. Both men battled for years before rising to lead their parties despite commentators had labelled them unelectable. John Howard proved his critics wrong. Now Michael Howard is intriguing Westminster observers about whether he could do the same. Much of the speculation surrounds his choice of election strategist - none other than the man who helped propel John Howard to the top, Australian Lynton Crosby. He's led Britain's Conservative Party since November, but Michael Howard is only now making himself heard with comments like this. There are too many people in Britain today who hide behind so-called human rights to justify doing the wrong thing. "I've got my rights" has become the verbal equivalent of two fingers to authority. Michael Howard has pledged to stop illegal gypsy camps, even if it means scrapping the Human Rights Act. That move follows his earlier rhetoric on asylum seekers and immigration - issues the Conservative Leader's Australian counterpart, John Howard, has used effectively in the past. We will decide who comes to this country and the circumstances in which they come. The man picking up the credit, and the blame, for the similarities in style is John Howard's former campaign director and Michael Howard's current strategist, Lynton Crosby. In the words of one Labour strategist, the Conservatives have seized control of the grid - in other words, day by day, their chosen subjects have dominated the headlines. By a very effective Tory campaign in these early stages led partly by their Australian election guru, Lynton Crosby. Is Lynton Crosby putting his stamp on the Conservatives' campaign? Well, he's providing some very good leadership, Particularly on the technical side of how the campaign runs. After all, he has been involved in some pretty good winning campaigns in Australia and he is a very, very competent man, I must say. In my dealings man, I must say. In my dealings with him, I have never ceased to be impressed by him. Critics have labelled the new approach racist. It's nonsense. The areas people are talking about are things like immigration. We have been very, immigration. We have been very, very careful to talk about the failure and the shambles of the and the shambles of the government's immigration policy, not about any

other aspect of it. What we're doing is reflecting people's concerns without giving in to any of the prejudices. The campaign has clearly struck a chord in Britain, but the Prime Minister, Tony Blair, has dismissed it as opportunistic. I think the problem of the Conservative campaign is that the issues that they are raising demonstrates that they've neither the confidence nor the courage to talk about the big issues facing the British people, and all the evidence is it's starting to backfire and it's starting to backfire very, very heavily. For some, his presence at Westminster and his role assisting the Conservative Party is the subject of mirth. What you gotta do is to get down amongst the people and find out what they're really thinking. What's going on in their minds. You've gotta find out what they're watching on television. You gotta find out what rings their bells. Right. And if it's popular with the public, it will work for us. Too right! I'm happy to do whatever it takes. Look into my eyes, look into my eyes. The eyes, the eyes. Political commentator Michael White from 'The Guardian' newspaper says it's too early to tell if the Tories' approach is backfiring but he does question whether the sharp and aggressive campaign that worked for John Howard can also work for Michael Howard. Well, the risky thing about moving political cultures - things that work in America don't work in Europe. I'm sure that's true of Australia, too. Some things do work, and all countries borrow each others' election techniques - Margaret Thatcher took a lot from Ronald Reagan. Labour in this country took a lot from Bill Clinton, and I'm sure Labor did in Australia, too. So it's a free market in ideas, and dirty ideas as well. Although Lynton Crosby and the Conservatives can claim to have taken control of the news agenda, they've some hard work ahead if they're to convert the publicity into an electoral victory. Kirsten Aiken, Lateline. John Rentoul is the chief editorial writer for the 'Independent' newspaper in Britain and author of what is widely regarded as the definitive biography of the British leader, 'Tony Blair: Prime Minister'. To discuss the coming election campaign and how the three main parties are placed, John Rentoul joins us now from our studio in London. Do you think Lynton Crosby and his team will play a big role in this campaign? Oh yes. I mean, Lynton Crosby effectively seems to be running the campaign, on the sort running the campaign, on the sort of non-politicians' side, on the official side of the Tory operation. I mean, it's very difficult for us outsiders to gauge his influence, outsiders to gauge his influence, of course, because we can only deduce from what we see on the outside. from what we see on the outside. But there certainly seems to be a greater coherence and a greater sharpness and a greater aggression about the conservative campaign about the conservative campaign this time, and people put it down to Lynton Crosby's influence, and Lynton Crosby's influence, and we've no way of knowing to what extent it's him and to what extent it's Michael Howard himself. Lynton Crosby in a sense is the frontman. He has a business partner who's a pollster who's also working for the Tories, quite famous here, Mark Texta. He does focus group polling and comes up with the issues as he did in Australian election. Has his role become public in Britain as well? role become public in Britain The Labour Party have tried to make something of it because I something of it because I understand that Mr Texta was involved in some litigation which probably ought not go into here. But he certainly has been used by the Labour Government to try to discredit Lynton Crosby and say he has been involved with some questionable tactics. But that sort of stuff is really for the political insiders. It's sort of inside the beltway, as they say in America. One of your fellow political commentators says that Crosby's brand of populism could do well in Britain because fear cells --fear sells, as well as sex. Well, yes, but I mean the conservatives did run immigration conservatives did run immigration as n issue in last election campaign n issue in last election campaign in 2001, and it got them precisely nowhere. Certainly they seem to be using the issue more aggressively and grabbing the headlines more effectively with it this time. But the conservatives are a right-wing party and you'd expect them to use immigration as an issue. What we don't know is the extent to which Lynton Crosby has tightened up the back room operation, the targetting of marginal seats, the focus group research and the polling. I mean, those are where I would expect he would make an impact behind the scenes as it were. If the polling scenes as it were. If the polling is bringing up Blair Government weak spots as being issues like crime, immigration and asylum seekers, how far do you think Michael Howard far do you think Michael Howard will be prepared to go with those issues? Well, not quite as far as John Howard, I suspect, but I mean, Howard, I suspect, but I mean, those are issues which the conservatives will always run. British politics will always run. British politics is different from Australian politics, in the sense that I think Tony in the sense that I think Tony Blair is a much more right-wing leader of the British Labour Party than most of the Australian leaders of the Labor Party have been. So Tony Labor Party have been. So Tony Blair does take a lot of that territory away from his opponents. The government has been quite hard line on immigration and asylum, trying on immigration and asylum, trying to get to grips with the asylum issue, which is extremely difficult and extremely open to misinterpretation. But that's going to be fought down to the wire but ultimately I think this election will be won or lost this election will be won or lost on public services, the state of public services, the state of health service and schools and the state service and schools and the state of the economy. I will come back to that in more detail in a moment. There were a few clues, or hints at least, in Tony Blair's opening shots, if you like, outside No. 10 just a few hours ago, when he specifically addressed immigration, he talked about protecting he talked about protecting Britain's borders but made it clear he would rule out introducing a quota system for asylum seekers. Will that for asylum seekers. Will that become an issue, the conservatives seem to want to bring in a quota system.

Yeah, it's already been an issue, Yeah, it's already been an issue, to quite an extent because this election campaign, although it has been formally announced today, has been running since January and the May 5 date forth election has been pretty well known and it would have taken something like the foot and mouth crisis to have put that off. mouth crisis to have put that off. I mean, so far we've only had the death of a Pope and the marriage of the heir to the throne. Neither of those is enough to most election date. This has been going for some time. The immigration quota issue, the asylum quota issue, sorry, is one that's up and running. It's one that I think the government can that I think the government can turn round, because the idea of setting round, because the idea of setting a quota for one's obligation to provide a safe haven for refugees falls apart as soon as it's examined. So serious commentators will not give it the time of day. Therefore it looks like a bit of a cheap shot by the conservatives because they're just making a token gesture in order to gain what may gesture in order to gain what may be regarded as the racist or at least the xenophobic vote. If the conservatives are taking some cues from Australia, it seems Tony Blair, if we read him correctly from his statement outside No. 10, will take some clues from another political mentor and it's Bill Clinton, he seemed to be saying right at the start of his address outside No. 10, it's the economy, stupid but not in those words. Yeah, I mean, I think that is - that is clearly Labour's strongest card. I mean, in that it underlies the strongest card, which is that people are beginning to is that people are beginning to feel that the huge amounts of extra that the huge amounts of extra money poured into the health service and education and to a lesser extent education and to a lesser extent the police are beginning to show some results, and I think the economy underlines all that. And it's paradoxical, because the one thing that the government has done on the economy is to give the Bank of England independence, so the government no longer sets interest rates and all the important

decisions are now taken independently of government. But independently of government. But the government still deserves credit government still deserves credit for not having made a complete mess of things, which is what Labour Governments have tended to do in Governments have tended to do in the past. One thing Tony Blair seemed past. One thing Tony Blair seemed to promise when he first came to power was a fresh way of looking at issues, a fresh face, indeed. Has issues, a fresh face, indeed. Has he - and optimism as well. He he exhausted to some degree that optimism and that freshness and optimism and that freshness and will that play against him? I'm afraid so. I mean, you can't carry on so. I mean, you can't carry on being a fresh face after eight years. There always was a tension, I think in Tony Blair's rhetoric between promising the new Jerusalem on the hill and saying you know it can't all be done overnight, it's gonna take time, we'll need two terms and now, you know of course he is now, you know of course he is saying we need three terms to finish the job and if Labour go on, four or five terms after that. So the early expectations which were very, very high and which to be fair to him, high and which to be fair to him, he wasn't responsible for completely himself, the early expectations himself, the early expectations were bound to be disappointed, and the country is rather full of disappointed voters at the moment, and the main issue for this and the main issue for this election campaign over the next four weeks campaign over the next four weeks is going to be the extent to which disaffected Labour voters switch mainly to the Liberal Democrats. What happens to the disappointed Labour vote is really the key to this election. Do they go to the Liberal Democrats, the third party, do they stay at home, or do they vote for smaller fringe parties vote for smaller fringe parties such as the Greens? And that's the question that we won't know the answer to until May 5. It does seem to be one of the critical issues because Blair is a conviction politician, a man apparently politician, a man apparently totally convinced of his own righteousness but he seems to have lost the sense in sections of his own party that in sections of his own party that he is actually telling the truth on a lot of issues? Yeah, he is a conviction politician now, but I have to say that's a recent

development. I mean, that only happened some time in the summer of 2002, when the build-up to the Iraq war began. Until that point, he was widely regarded, and ridiculed, as trying to be all things to all people, just being a smile and a vacuous politician who sought the lowest common denominator. Since Iraq of course he's transformed instantly into the opposite kind of politician which is a sort of sub Margaret Thatcher in trousers, a conviction politician who is messianically convinced he is right. Neither of those is true. He is actually a perfectly normal, sane politician who has to make politician who has to make pragmatic choices but does believe that the Iraq war was justified. That is not a view that's shared by the a view that's shared by the majority of the country, as your report pointed out, and he has taken a pointed out, and he has taken a huge hit from that in public opinion. Do you think that his big problem in that hit, if you like, in his credibility on the Iraq war and credibility on the Iraq war and the weapons of mass destruction claims and so on is going to hit him worst among his own base? Yeah, I mean, the real question is what happens the real question is what happens to the disaffected Labour supporters. the disaffected Labour supporters. I mean, the centre ground of British politics - I mean, yeah, they're fairly disaffected with him, too, for all sorts of reasons, because I mean, once the government has been in power for eight years, it's accumulated a whole range of discontents over all sorts of things, from fox hunting to immigration. But ir prac is the really big --but Iraq is the really big issue that really moved public opinion. If you look at all the opinion polls before Iraq they said one thing and if you look at all one thing and if you look at all the opinion polls after Iraq, they said another. That's been the huge event

in British politics over the past in British politics over the past 10 years. I mean, virtually since the last defining event in British politics which was when we got chucked out of the European chucked out of the European exchange rate mechanism, which was what effectively did for the last conservative government. It is a pretty hard issue, isn't it, for pretty hard issue, isn't it, for the conservatives to take real conservatives to take real advantage of, because in the end, they of, because in the end, they support the troops in Iraq as well and the intervention? Yeah, that's intervention? Yeah, that's precisely why this election turns so much why this election turns so much more on the third party, the Liberal Democrats, who are the sort of protest party in the middle, although they have actually if you look at their policies, they are actually to the left of the new Labour Party in many respects which makes them the ideal vehicle for picking up protest votes from the Labour base and Charles Kennedy, Labour base and Charles Kennedy, who is the extremely personable leader of the third party, is playing a very canny game of being able to pick up disaffected voters from pick up disaffected voters from all part of the spectrum. Tory part of the spectrum. Tory supporter also vote for him just as much as disaffected Labour but there are more disaffected Labour supporters around. I think the Liberal Democrats will do extremely well in this election, in terms of votes, but not because of our voting system, in terms of seats. So there's no chance they konds up holding the balance of power and dictating certain positions in the Blair Government, for example? Well, I think there is. I mean, there have been a rash of opinion polls, if you can call four opinion polls a rash, this morning, all of which suggest that the Liberal Democrats are doing quite well on 21% or thereabouts, and that the conservatives are not that far behind Labour in the national picture. Of course, the really big question for this election campaign is that nobody actually knows how accurate our opinion polls are, because in the last two elections, the opinion polls have been quite inaccurate. I mean, they've overestimated the Labour share of the vote to quite a large extent the vote to quite a large extent but it doesn't matter because Labour it doesn't matter because Labour won by a huge margin both times. If you

go back to 1992, opinion polls got that election hugely wrong and that election hugely wrong and there was a huge inquest afterwards and nobody really knows to what extent they've managed to improve. But there is a suspicion that the opinion polls continue to overstate Labour's support in the polls, in which case, the fact that the conservatives are only a few points behind could spell real trouble. It doesn't suggest that the conservatives can win, of course, but a hung parliament in which the third party, the Liberal Democrats, hold the balance of power would certainly keep us journalists in business for the next four or five years. That opinion poll problem is pretty much universal, I think. We will have to leave it there. We thank you very much for taking the time to come and talk to us tonight. My pleasure. Tomorrow morning, borrowers find out if they've been hit with another increase in interest rates. As the Reserve Bank board met today, the Prime Minister embarked on a last-minute lobbying effort against an increase, saying record oil prices were already punishing consumers. And business groups warned that another rise could prove one too many as surveys pointed to a deterioration in confidence. Phillip Lasker reports. Has he or hasn't he? The Reserve Bank Governor, Ian Macfarlane, and his board met today. Its decision will be revealed in the morning. I believe the bank are keen to put up rates by another 25 basis points. They've indicated a tightening bias and they're keen to do it and they're worried if they don't do it tomorrow they may not get a chance. Because there's a view the RBA wants to stay clear of the headlines in the lead up to the May federal budget. It's a budget likely to be boosted by increased petrol excise courtesy of record high oil prices. Although that was not the Prime Minister's focus as he lobbied against a rate rise, saying rising fuel costs were already doing the Reserve Bank's bidding. That is something that's having a direct impact on consumer demand, because if you have to spend all those more dollars a week on petrol you don't have it to spend on something else. That's ordinary common sense. That's one of the factors that I'm sure the Reserve Bank will take into account. But should the RBA choose to ignore the Prime Minister and raise rates, the federal opposition has its own take. It will be because of federal government policy - their spending spree. Their $66 billion spending spree during the election campaign and the skills crisis. People like nickel producer Mark Ashley is facing the sort of skills crisis that makes the Reserve Bank nervous about inflation. Well, we're seeing wage increases of between 10% to 20% per year in some instances at the moment. But today's Chamber of Commerce and Industry survey shows business conditions and confidence still sound but deteriorating. It's a trend confirmed by the National Australia Bank's Alan Oster who puts out a business survey often referred to by the Reserve Bank. After it peaked in October-November last year, it started to erode away. You need to be a little bit careful - there a lot of seasonal factors there - but at the end of the day, business conditions and confidence is basically eroding at present. The Reserve Bank Governor said in February we'd have to get used to growth rates starting with 2 or 3 rather than 3 and 4. But what's making many so nervous is the last growth rate started with 1. And the previous rate rises are making their mark on borrowers and consumers. Phillip Lasker, Lateline. To the markets now. The All Ordinaries ended the day's trade back in positive territory. But materials stocks eased.

Now to the weather. And that's all for this evening. If you'd like to look back at tonight's interview or review any of Lateline's stories or transcripts, you can visit our website at - I'll be back again tomorrow, so join me then. Goodnight. Captions by Captioning and Subtitling International.