Taylor had not recovered sufficiently from a muscle tear in his left side which he picked up during the one-day international series against Pakistan, while Santner was still sore from bone bruising in his right foot, New Zealand Cricket said in a statement.
“Everyone wants to play against Australia, so both guys are understandably disappointed to be missing out,” coach Mike Hesson said.
“The players and the medical staff worked hard to be available for the match, but in the end ran out of time.
“Ross is back hitting balls again and is targeting a return in the Island of Origin match before we head away to the ICC World Twenty20.
“Mitch is on track to be fit for the ICC World Twenty20 and we’ll continue to monitor both players closely.”
The pair's absence means spinner Mark Craig and Henry Nicholls, who scored 59 on his test debut in Wellington, have been retained in the squad.
New Zealand, who were defeated by an innings and 52 runs at Wellington's Basin Reserve on Monday, will bid to tie the series in the second and final match in Christchurch and give retiring captain Brendon McCullum a winning send-off.
Squad: Brendon McCullum (captain), Corey Anderson, Doug Bracewell, Trent Boult, Martin Guptill, Matt Henry, Tom Latham, Henry Nicholls, Mitchell Santner, Tim Southee, Neil Wagner, BJ Watling, Luke Ronchi, Kane Williamson
(Reporting by Ian Ransom in Melbourne; Editing by Nick Mulvenney)
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