Australia need just 30 runs to take a first innings lead against New Zealand after dominating day two of the second Test in Adelaide.
Brett Lee took 3-6 in a 27-ball spell as the Black Caps collapsed from 262-6 overnight to 270 all out.
Australia lost Matthew Hayden and Simon Katich early on, but Ricky Ponting (79) and Michael Hussey (69no) took charge with a crucial stand of 106.
Michael Clarke then batted impressively with Hussey to leave Australia on top.
New Zealand's hopes of building on a battling first day batting performance were dashed in a hostile spell from paceman Lee.
A clever change of pace saw Lee dismiss the dangerous Brendon McCullum, the Black Caps' main hope for a big total, for 30.
He also had Iain O'Brien caught behind before knocking Chris Martin's middle stump out of the ground to inflict another duck on the number 11.
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Australia's reply did not begin impressively, with Hayden run out for 24 after threatening to mark his 100th Test in style.
The big Queenslander took off for a single but was stranded as Katich stayed anchored at the non-striker's end.
Kiwi captain Daniel Vettori then had Simon Katich (23) caught at bat-pad by Jesse Ryder to give his side hope of restricting Australia.
But Ponting was in magnificent form and put Australia in control, making batting look easy and stroking 11 boundaries by the time he reached his half-century.
The Kiwis then applied the brakes to Ponting and he was out pulling a ball from O'Brien to mid-wicket ,where he was caught for 79 by the towering Peter Fulton.
Hussey and Clarke were relatively untroubled in the final session, with some patient but stylish batting to put on an unbroken 86-run stand for the fourth wicket.
Clarke strode to the crease and got off the mark with a textbook straight drive, while Hussey also played some memorable sweeps and pulls as Australia look to build up an unassailable first innings lead.
For New Zealand, Vettori bowled tirelessly over the final two sessions and finished with figures of 1-54 off 28 overs while Iain O'Brien took the important wicket of Ponting and has 1-63.
The world's three leading news agencies are not covering the series due to a dispute with Cricket Australia.
Reuters, Agence France-Presse and Associated Press have suspended all coverage of the 2008-09 season.
Their photographers and reporters did not supply material from within the ground. As a result, we cannot use pictures from the current match.
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