The result meant that both teams occupy the fifth and sixth positions at the end of the pool stages and will play each other again to decide the wooden spoon.
It was heartbreak for New Zealand who could have catapulted to play in the bronze medal play off had they scored another two goals.
That would have denied Japan the opportunity to play Malaysia.
However they were only two goal short and thus ended up fourth, behind Japan.
“ We relish the opportunity to play Australia again but really we should have got the goal to put us through to the bronze medal match,” said New Zealand coach Bryce Collins.
“ My players perhaps tried too hard to get that elusive goal,
“ I expect Australia to come hard at us tomorrow.”
This was Australia’s worst showing in the history of the tournament.
They had previously finished a lowly fifth at the end of the pool matches.
“ We were poor and all credit to New Zealand for their excellent performance,” said Aussie coach Ben Bishop.
“ We need to rest and reflect on our game and perform better if we want to avoid the last spot.”
It was a battle of the Oceania countries that provided good Hockey for the fans who stayed back for the last preliminary match.
New Zealand took the lead through Maks Wyndham Smith in the 23 minute.
They doubled their advantage through Tim Neild in the 31st minute.
Two minutes later it was Charl Ulrich to score to make it 3-0.
But the Aussies broke the heart of the Kiwis with a late goal in the final minute by Patrick Coates.