After a solid 70-run opening partnership for New Zealand, Australian fast bowler Doug Bollinger struck again to leave the home side in trouble at tea in its second innings of the first Test at the Basin Reserve in Wellington.
BJ Watling (13 not out) and Tim McIntosh (10 not out) got the ball rolling for their side after a major batting collapse earlier in the day allowed the Aussies to enforce the follow-on.
However Bollinger, who claimed a five-wicket haul in the first innings, struck to remove Watling lbw for the second time in the Test before claiming Peter Ingram's (one) wicket two overs later to leave New Zealand struggling on 2-87 at tea.
Australia came out firing during the morning and bowled the Kiwis out for just 157.
New Zealand was always going to be hard-pressed to chase the 5-459 first innings total set by Australia but should have done a lot better given the nature of the pitch.
And the hosts were on the back foot in the first over of play on Sunday as Australia made a major breakthrough to end New Zealand's mini-fightback with skipper Daniel Vettori caught in the slips off Ryan Harris for 46 runs.
Brendon McCullum then attempted to revive New Zealand's innings from its fragile state at 5-112 and did well to make a start before seamer Doug Bollinger struck twice to extinguish any hopes of a late stand.
Bollinger dismissed both McCullum (24) and Martin Guptill (30) in the space of three balls to all but end the New Zealand innings within an hour of play, leaving the home side on 7-148.
The final three New Zealand wickets fell cheaply as the fiery Australian bowlers intimidated and then pounced to force the follow-on.
Australia had all but guaranteed itself a big chance of claiming a win thanks to a record fifth-wicket partnership between Michael Clarke (168) and Marcus North (112 not out).
The partnership, after Simon Katich's brilliant knock of 79, helped Australia to a dominant total of 5-459 before captain Ricky Ponting declared and sent New Zealand into bat.