Debutant Gary Ballance (17) and all-rounder Ben Stokes (23) were at the crease at the break after the cheap departures of captain Alastair Cook (7), nightwatchman James Anderson (7), Kevin Pietersen (3) and Ian Bell (2).
The hosts, who made 326 in their first overnight, now look well on course for a fifth dominant victory in innings before reducing England to eight for one the series and only the third 5-0 sweep in the long history of Ashes contests.
Ryan Harris (2-28) started the carnage with the second ball of a beautiful day at the Sydney Cricket Ground when a clearly out-of-sorts Cook inexplicably padded up to an inswinger and was trapped leg before.
Harris could have had a second wicket with his next delivery when Bell edged the ball behind only for Shane Watson to fluff a reasonably easy catch in the slips.
England's nemesis Mitchell Johnson (2-19) then opened up from the other end and gave Anderson a torrid time, striking his fellow paceman on the hand with one delivery that left him nursing a very sore thumb.
Anderson braved another couple of overs of short bowling before departing after finding the edge with a stab at a fuller length Johnson delivery, which Australia captain Michael Clarke leapt to claim in the cordon.
Pietersen lasted just nine balls and 12 minutes before departing courtesy of another edge to the slips from a Harris delivery, which Watson took this time after a juggle.
With England now 4-17 after just 32 minutes of play, Bell did his best to dig in.
He took 42 minutes to get off the mark but had just two runs on the board 14 minutes later when a superb delivery from Siddle had him caught behind by Brad Haddin and England were 23-5.
Harris and Johnson were now out of the attack but Australia's other bowlers retained their discipline and Ballance and Stokes, playing in only his fourth Test, were only able to contemplate survival initially.
Ballance needed a replacement helmet after a venomous Johnson bouncer crashed into his head and bent the grill some 10 minutes before lunch but he survived until the break.