But the Australian men were able to put their Trans-Tasman rivals back in their place, winning 12-10 on Sunday to claim bronze in a spiteful after-the-siren thriller.
On an entertaining final day of action in Perth, the Australian women defeated the USA 26-5 in their semi-final in 34-degree heat at HBF Park.
It set up a tantalising decider against NZ, who had already beaten Australia twice in three finals this season, including a 36-7 romp in Singapore a week earlier.
Australia were stewing over that heavy defeat all week, and made a stunning start to the decider via a try to Heidi Dennis.
But it all went pear-shaped from that point on, with unforced errors and missed tackles bringing about Australia's downfall as NZ went on to win comfortably 29-7.
NZ's two tries in the first half both came through their ability to fend or shake off multiple tackles, and the visitors piled on more pain in the second half to claim their third tournament win from four events this year.
It meant Australia were forced to settle for silver, a year after they won gold at the Perth Sevens.
"NZ had a cracking game. They're one step ahead of us at the moment," Australia coach Tim Walsh said.
"Hopefully by the (end-of-season) finals, they'll run out of cards to play and we'll have a few up our sleeve.
"We need to shorten that gap up a little bit. Physically they had us, and I thought technically as well they played some stuff that was different."
Australian star Maddison Levi struggled for space against a tight Kiwi defence in the final.
It was in stark contrast to the semi-final earlier in the day when Levi scored two tries, including a stunner in which she fended off two opponents in quick succession.
The Australian men suffered a 28-12 semi-final loss to South Africa, and were down 10-5 early in the second half against New Zealand in the bronze medal play-off.
Tempers boiled over on the stroke of halftime when Australia captain Henry Hutchison was whacked in the head, leading to an all-in melee.
There was more drama in the dying minutes of the match.
Kitiona Vai was yellow-carded with 90 seconds to go for a high tackle, giving Australia a seven-versus-six advantage.
And with 10 seconds remaining, Josh Turner took a quick tap from a penalty to bust over the line, levelling the scores.
Ben Dowling nailed the straight-forward conversion after the siren, handing Australia victory.
"Huge emotion," Hutchison said of Australia's second win over NZ this tournament.
"It's always tough coming off a semi-final loss.
"To bounce back and beat the Kiwis twice in a weekend - we haven't done that in a while.
"So really proud to do that, especially at home."
South Africa took out the men's final with a 21-19 win over Singapore Sevens champions Fiji, who remain on top of the rankings after four events.
Australia are fifth in the standings, with South Africa second and NZ third.
The next Sevens event will be held in Vancouver on March 7-8.
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