OP:
http://www.yourmortgage.com.au/article/offset-vs-redraw-79457.aspx
http://finance.ninemsn.com.au/pfmanagingmoney/banking/8126268/banking-go-easy-on-the-redraw
Like everyone has said... offset!
redraw... maybe only if you're not disciplined about money and worry you'll use whatever...