McGrath was right on target with the new ball

Glenn McGrath moved ever closer to the 500 wicket milestone as Australia gained the upper hand on day three of the third Test against New Zealand.

He dismissed Craig Cumming and James Marshall to lift his tally to 497 as the Kiwis struggled to 11-2 at stumps.

Australia had earlier totalled 383 in their first innings, a lead of 91.

They were 297-7 when Simon Katich fell for 35 after passing 1,000 Test runs, but Adam Gilchrist hit 60 not out off 62 balls to give them the advantage.

His innings included a six and 10 fours but he eventually ran out of partners as left-armer James Franklin finished with figures of 6-119, his best in Tests.

The day began badly for Australia when Michael Clarke was run out for 22 after they had added only seven runs to their overnight 219-4.

But night-watchman Jason Gillespie kept Katich company for 28 overs as they added 71 for the sixth wicket.

His 145-ball vigil was finally ended when he was caught behind for 35 off Chris Martin and Katich followed for the same score in the next over when he mis-timed an attempted pull off Franklin and lobbed a catch to Paul Wiseman.

Gilchrist played and missed on a number of occasions early in his innings, but dominated the home attack during an afternoon session which was twice interrupted by rain.

You can't help learn when you're playing against such a good team James Franklin Full close of play reaction

Shane Warne fell to Franklin for a single but Michael Kasprowicz contributed 23 valuable runs to a stand of 74 with Gilchrist, who lifted his series aggregate to 343 runs in three innings in the series.

Kasprowicz was eventually bowled by Franklin, who accounted for last man McGrath with the opening delivery of his next over as wicket-keeper Brendon McCullum made no mistake.

When New Zealand began their reply, it took McGrath only two balls to put them on the back foot as he won an lbw decision against Cumming to dismiss him for a duck.

Marshall followed for three when he was caught in the slips by Justin Langer, and brother Hamish and skipper Stephen Fleming were happy to accept an offer of bad light from the umpires before any further damage could be inflicted by the Australian seamers.

New Zealand: C D Cumming, J A H Marshall, H J H Marshall S P Fleming (Capt), L Vincent, N J Astle, B B McCullum (Wkt) D L Vettori, J E C Franklin, C S Martin, P J Wiseman.

Australia: J L Langer, M L Hayden, R T Ponting (Capt), D R Martyn M J Clarke, S M Katich, A C Gilchrist (Wkt), S K Warne J N Gillespie, M S Kasprowicz, G D McGrath.