CANBERRA, AAP – The federal government is reducing the interest rate it charges pensioners who tap into the equity of their home.

The announcement comes ahead of Thursday’s release of the midyear budget review, which is expected to see an improved budget position against the backdrop of rapidly recovering economy.

The midyear economic and fiscal outlook could be the treasurer’s last major economic showpiece should Prime Minister Scott Morrison head to the polls in March rather than May, and before the 2022/23 budget planned for March 29.

Social Services Minister Anne Ruston said the government was reducing the interest rate from 4.5 per cent to 3.95 per cent on its Pension Loans Scheme from January 1, which will now be known as the Home Equity Access Scheme.

The scheme allows older Australians to get a voluntary non-taxable fortnightly loan from the government up to a maximum value of 150 per cent of the rate of the age pension.

“The Morrison government is committed to finding new and innovative ways to support older Australians in their retirement,” Senator Ruston said.

The prime minister said this provided a safe alternative for Australians to access the equity in their own home and improve their incomes and their living standards in their retirement years.

“It just gives them another tool to have a better quality of life in their retirement and using that equity in their own home to be able to achieve that,’ Mr Morrison told 4BC Brisbane radio.

Meanwhile, Urban Infrastructure Minister Paul Fletcher announced a further $316.1 million in funding for the Coomera Connector, which he believes is a vital piece of infrastructure for the people of the Gold Coast and southeast Queensland.

The additional funding brings the total Commonwealth investment in the 16-kilometre connection between Coomera and Nerang to $1.07 billion.

“This commitment shows that the Morrison government is serious about getting on and delivering this state-defining project, which will generate local jobs, ease congestion particularly on the M1, and help commuters get home to their families sooner and safer,” Mr Fletcher said.