Australia's experiment of playing two all-rounders in the same side proved short-lived as Shane Watson was dropped from the squad for the second Test against New Zealand in Adelaide which begins on Friday.

Victorian paceman Peter Siddle replaces Watson in the 12-man party after the Queenslander could only manage scores of one and five and match figures of 2-54 during the first Test in Brisbane.

The change confirms that Andrew Symonds is now well and truly back in favour as the national selectors' preferred Test all-rounder following a three-month absence from the national team due to disciplinary reasons.

National selection panel chairman Andrew Hilditch intimated Watson was a tad unlucky to be left out of the team following a reasonable recent tour of India which saw him score 170 runs at 24.28, including his highest Test knock of 78, and 10 wickets at 32.10.

"It is obviously disappointing for Shane Watson to be omitted from the Test 12 after playing well for us during the four-Test period in India and this week at the Gabba," Hilditch said.

"We have been very pleased with Shane's development, but for the Adelaide Test our intention is to play a specialist spinner rather than the make-up used successfully in the first Test.

"Having made that decision we thought it was important that Shane took the opportunity to play for Queensland to ensure he had played as much cricket as possible leading in to the remainder of what is a very important Australian summer."

Off-spinner Jason Krejza, who was omitted for the first Test after a 12-wicket debut in India, will almost certainly be included in the XI on a traditionally spin-friendly Adelaide Oval pitch.

"I would expect that we would play the spinner in Adelaide, historically it's been a place that spinners have done well in," Ponting said.

"It was probably a little bit of a setback for Jason not playing this game, coming off 12 wickets, but I think if we had have had good weather going into this game he would have played.

"We've got a decision to make in Adelaide, or maybe a few decisions to make on our team for Adelaide and we (have) got to be a bit more specific with the way we pick our team now."

Australia lead the two-Test series against the Black Caps 1-0 following its 149-run victory at the Gabba on Sunday.

Australia squad: Matthew Hayden, Simon Katich, Ricky Ponting (capt), Michael Hussey, Michael Clarke, Andrew Symonds, Brad Haddin (wk), Brett Lee, Jason Krejza, Mitchell Johnson, Stuart Clark, Peter Siddle.