MELBOURNE: Middle order batsman Travis Head was within sight of his second test century as he combined with captain Tim Paine to drive Australia to 431 for five at tea on day two of the Boxing Day test against New Zealand on Friday.

Head was 98 not out, with Paine on 77 and New Zealand's hopes of a series-levelling victory seemingly all but lost at a sun-drenched Melbourne Cricket Ground.

Australia resumed on 336 for five after lunch, with Head and Paine looking to continue their attack on the ageing ball.

They strode off with an unbeaten partnership of 147 runs, having comfortably seen off New Zealand's pace bowlers and extracted more than four runs an over from spin-bowling all-rounder Mitchell Santner.

With Australia increasingly untroubled on a flattening MCG wicket, New Zealand captain Kane Williamson may be ruing his decision to send Paine's team into bat after winning the toss. Paceman Neil Wagner earlier denied Steve Smith his first century of the home summer, dismissing the master batsman with a short ball for the third time in the series.

Wagner removed the former skipper for 85 with a bouncer that reared up and pinged off the shoulder of the bat before being plucked out of the air with one hand by a leaping Henry Nicholls in the gully.

New Zealand were briefly buoyed by the wicket but Head and Paine counter-attacked with vigour to take the wind out of their sails.

The tourists trail 1-0 in the three-match series after losing the pink ball test in Perth by 296 runs.