The home favourite had been brilliant on day two as he recorded the lowest round of the week with a 65 and he continued that form on Saturday, going bogey-free to get to 14 under and lead the way from ISPS HANDA Melbourne World Cup of Golf team-mate Marc Leishman.
The World Number 21 carded an impressive 69 to sit four shots clear of countryman Matthew Millar and 2017 champion Harold Varner III as the second event of the 2019 European Tour season looked to be developing into a two-horse race.
A victory for Smith would make him the first player to win this title in back-to-back years since Robert Allenby in 2000 and 2001, while Leishman is also looking for a second European Tour title but a first on the PGA Tour of Australasia.
“The last year I’ve been playing some really good golf,” said Smith. “Probably over the last three days has been some of the best golf I think I’ve played both mentally and pulling off the shots. I’m feeling really confident and looking forward to tomorrow.
“I did a really good job today when I was out of position, just taking less risks and putting myself into the centre of the greens and taking a par. It’s what you have to do around here.
“There’s plenty of birdie opportunities out there and that’s what you have to realise and I did a good job of that.”
Jake McLeod put an approach to tap-in range on the first to move into a share of the lead and Smith needed an excellent up-and-down from the sand at the second to stay at nine under.
The overnight leader soon found his rhythm though, hitting a stunning tee-shot into six feet for a birdie on the fifth and when McLeod hit a poor tee-shot on the seventh and had to play out sideways, the lead was up to two.
Leishman broke out of the group at eight under as he drove up to the side of the eighth green and chipped to three feet but Smith made the most of the par-five ninth after a beautiful lag putt to lead by two again.
McLeod and Leishman both hit excellent approaches into the tenth to apply the pressure on Smith but Leishman found an unfortunate lie in a fairway bunker on the 11th to slip back to nine under.
Smith and Leishman both made the most of the par-five 12th and when the leader holed a 20-footer on the 13th to get to 13 under, his lead was three shots.
McLeod made bogeys on the 12th and 16th and the group in third was now six shots off the lead and three behind Leishman.
A tee-shot to two feet on the 16th then moved Smith to 14 under but Leishman hit back from 15 feet on the 17th.
“That’s the best I’ve played all week and the worst score,” said Leishman. “A couple of bad breaks and a few putts where I hit good putts and they didn’t go in, which happens occasionally.
“I’m happy with the day. It puts me a few more back than I would like to be but it’s going to be tough tomorrow. I hear the wind is going to get up so that gives me a bit more of a chance.
“It’s important for me tomorrow to put a bit of pressure on him early and make him think about it and be there or thereabouts with a few holes to go, hopefully.”
American Varner sandwiched a hat-trick of birdies from the eighth with bogeys on the seventh and 11th but when he made another gain on the 13th, he was right in the mix. A double-bogey on the 15th then halted his momentum before he hit back with a birdie on the next.
Millar was bogey-free in a 67, making birdies on the sixth, eighth, tenth, 12th and last.
Home favourites Braden Becker, Ben Eccles and Matt Jager were eight shots off the lead, one clear of McLeod – who bogeyed the 17th and 18th – countrymen Nick Flanagan, Mathew Goggin and Dimitrios Papadatos, and South Korea’s Jaewoong Eom.
India’s Gaganjeet Bhullar suffered disappointing third round. He had struggle throughout the day with four bogeys and a double with no birdies to survive . He lost 48 spots on the leaderboard after scoring 78 to finish in T56 at the end of third round.