Changing from Redraw to Offset

You might find a line of credit could be a better facility to use. Ask the bank about it.

An offset account is like a savings account it is a lot different to a redraw facility.
So if you have spare money you put it in an offset account up to the loan amount and save interest charges on your loan.
So you could put the 50k redraw into a linked offset account but you still are paying interest on a 50k loan as you borrow 100k to put 50k into a linked offset account to reduce the interest charged to be on 50k instead of 100k.

A redraw is a facility where you are usually ahead of the loan schedule and can re – borrow the amount you are ahead of the loan.

An LOC allows you( if you can service the LOC) to borrow up to 80% of the value of the property.
80% LVR  (mortgage) + LOC) / Value of home x 80/100
assume value of house as a guess for an example at $200,000
So $200,000 * 80/100 = $160,000 so if you owed 50k you can borrow $110,000
So 80% LVR = 110k +50k / 200,000 * 100
80 = 160k/ 200k *  100
This facility once set up would give you access to in this example only to borrow  $110,000 in an emergency or for a deposit for the next IP or repairs that suddenly came up on an IP. And you pay interest when you draw out money. It is like a massive bank card in a sense.
So you need to use financial restraint if you have one set up and use it for investment purposes only..

Do you understand, from a tax POV,  you can't simply redraw the $50k and make your loan $100,000 with the $50k in the offset

True – I was thinking the person may want to redraw to increase the loan and then later rent it.

But there could also be tax implications if they want to increase the loan and then use the extra money for investments