Australia seized control of the opening test on Friday after a miserable day for hosts New Zealand left them 217 runs adrift in Wellington and with a mountain to climb to stay in the match.
The visitors finished on 13 for two in their second innings with nightwatchman Nathan Lyon not out on six and opener Usman Khawaja on five after Steve Smith and Marnus Labuschagne departed cheaply.
Tim Southee bowled Smith with his third ball, then had the out-of-form Labuschagne caught behind by Tom Blundell.
However, Southee dropped Lyon in the slips late on from Matt Henry to cap a frustrating day for New Zealand at Basin Reserve.
Cameron Green earlier smashed an unbeaten 174 as Australia raced to an imposing first-innings 383, before bowling out New Zealand for 179.
Australia struck early, dismissing Tom Latham (5) before Kane Williamson and Rachin Ravindra fell for ducks within the space of five balls to leave them tottering at 12 for three.
Glenn Phillips offered the most resistance before he was dismissed for 71, caught by Mitchell Starc off a Josh Hazlewood delivery. Australia then quickly picked off New Zealand's tail.
Phillips' sixth-wicket partnership of 84 with Tom Blundell (33) was the meagre highlight.
"The pitch was moving around a little bit and they were hitting really good areas so it was up to us to get the pressure back up on them," said Phillips.
"Obviously the way Green played with Hazlewood, they did really well and put up a massive partnership. It's not ideal for us but that's what test cricket is like."
The Black Caps never recovered after the horror start by their top order.
Latham played on in the fourth over, unable to deal with the pace of Starc. It got worse when Williamson and Ravindra were out soon after.
Williamson was run out after a comical collision with opener Will Young midway down the wicket, with Labuschagne's throw pitch-perfect.
More New Zealand misery followed three balls later when Ravindra was caught by Lyon at point.
Daryl Mitchell managed 11 before being taken behind by wicketkeeper Alex Carey off Cummins.
Young followed next ball when he nicked Mitchell Marsh, with Carey again collecting to leave New Zealand struggling at 29 for five before Blundell and Phillips briefly steadied the ship.
Phillips was finally removed when he pulled a Hazlewood bouncer to Starc at deep backward square. Spin king Lyon ended with 4-43.
Green had started the morning by picking up where he left off, adding to his overnight 103 by clobbering a six to push the visitors past 300, having resumed on 279 for two.
The 24-year-old piled on the misery for the Black Caps bowlers with another six to reach 150, with his 174 eclipsing the 114 he scored last year against India for his maiden test century.
His innings included 23 fours and five sixes, rescuing the Australians after their top-order batsmen struggled in their first innings on Thursday.
Green led the charge in a superb 116-run last-wicket partnership with a plucky Hazlewood, who survived 62 balls for his 22 before being caught by Ravindra off Henry.