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Steve Smith showed he has the means to handle New Zealand's short stuff as he took Australia to stumps at 4-257 on Boxing Day at the MCG.

Steve Smith proved his status as cricket's best problem solver as he pulled and weaved his way through New Zealand's bumpers to help Australia to 4-257 on Boxing Day.

Bounced out in his last three Test innings against New Zealand, Smith went to stumps unbeaten on 77 at the MCG after a gripping day of Test cricket.

His innings took him to 10th on Australia's all-time run-scoring lists, and helped the hosts claim the honours in front of a bumper crowd of 80,473 after being sent in to bat.

After a low-key opening half of the Test summer by his lofty standards, Thursday's knock was a return to the controlled Smith he's best known as.

He wore several balls on the body and ducked his way out of others at the MCG.

Fighting hard, he rarely pulled the quicks though when he did he hit the ball along the ground to defy fields set to exploit the stroke.

When New Zealand overpitched, he drove tremendously on a pitch he admitted he never felt in on.

"I've been faced with something a little bit different this series with the fields that have been set and the way they have gone about it," Smith said.

"I was happy today with the way I was able to get through it.

"I was able to ride a few, copped a few hits and I thought I pulled quite well from the right length."

If Smith reaches triple figures on Friday, he will become the first player to score centuries in five straight Tests at the MCG.

Travis Head will start day two alongside Smith, getting through a tough period against the second new ball to go to stumps unbeaten on 25.

"After getting sent in you take 4-257 at the end of the day," Smith said.

"One more good partnership tomorrow will set the game up for us."

Smith's resilience came after Marnus Labuschagne chalked up a half-century for the fifth innings in a row.

But his pursuit of a fourth half-century of the summer ended when a Colin de Grandhomme ball ricocheted off his elbow and on to his stumps on 63..

Already the leading Test run-scorer for 2019, Labuschagne is yet to be dismissed for less than 50 this summer and has passed the milestone in nine of his past 12 innings.

His 83-run third-wicket partnership with Smith was crucial in giving Australia control, after they found themselves in dangerous waters early as the Kiwis grabbed two wickets before lunch.

After tongue-in-cheek claims of bodyline in Perth, where Australia's top six fell to short balls in the second innings, no Aussies were dismissed by bouncers on day one.

But the Black Caps still troubled the hosts with the kind of movement that has been missing from the MCG in recent years.

Left-armer Trent Boult (1-60) produced an absolute peach to bowl Joe Burns for a golden duck in the first over, swinging it in at the right-hander and nipping the ball back between bat and pad.

David Warner edged Neil Wagner (1-40) in the opening session with his feet stuck on the crease, allowing Tim Southee to take a one-handed stunner at second slip.

Matthew Wade also edged behind, nicking one from de Grandhomme (2-48) that swung in at him and cut away from the medium pacer.