Left-arm paceman Mitchell Johnson has reduced the Black Caps to rubble in a destructive session after lunch in Brisbane, finishing with four wickets as New Zealand collapsed to be all out for 156.
Johnson took three wickets after lunch, including two in two balls, to finish with figures of 4/30 and leave the Kiwis 58 in arrears of Australia's first innings total of 214.
Brett Lee (2/38), Shane Watson (2/35) and Stuart Clark (2/46) also broke through as play resumed to machine-gun a Black Caps innings that never really got off the ground.
Australia will now try to build a big lead on a Gabba wicket drying quickly and looking as if it contains some runs, despite New Zealand's inability to capitalise on improving conditions.
It was a terrible start for the Black Caps in the afternoon sun, with Ross Taylor failing to add to his 40 at lunch when he was trapped dead in front in Lee's first over following the resumption of play.
Allrounder Grant Elliott was living dangerously, never looked settled and was bowled by Watson in confusing scenes, with neither party seeming to know the bails had been rattled after Watson nipped one back past Elliott's pads.
With the score at 6/127, captain Daniel Vettori looked to steady the ship but he fell cheaply, spooning one to Andrew Symonds at point for two and becoming Johnson's first post-lunch scalp.
Yesterday's hero with the ball, teenage prodigy Tim Southee, strode out to the crease with a heroic innings beckoning but was dismissed for a duck in similar circumstances as his captain, this time with Symonds leaping in the air for the catch.
At 8/143, Iain Johnson needed to hang around and support the stoic Daniel Flynn (39 not out) but that was beyond him. He edged one to Michael Clarke at slip to set up Mitchell Johnson's hat-trick.
Chris Martin, possibly Test cricket's worst batsman, survived the hat-trick ball but didn't linger for much longer, being bowled by Clark for one to wrap up the innings.