Political anger over rising mortgage rates has increased after three more banks lifted their lending rates and ANZ Banking Group laid out plans to shed 1000 jobs.
The nation's largest home-loan provider, Commonwealth Bank of Australia, on Monday raised its standard variable mortgage by 10 basis points while National Australia Bank increased its rate by nine basis points.
ANZ and Westpac took similar steps last week, moving by six and 10 basis points respectively.
The mid-sized Bendigo and Adelaide Bank has lifted its rates, by an even larger 15 basis points, citing higher funding costs, despite the Reserve Bank of Australia (RBA) leaving the official cash rate unchanged at last week's board meeting.
Treasurer Wayne Swan said the "very, very profitable" banks should be working for their customers, not just their shareholders.
"What we need to see is some red-hot competition out there," he told ABC Brisbane radio on Monday.
Opposition treasury spokesman Joe Hockey said the treasurer was sending mixed messages by telling Australians the banks were strong and then telling them to shop around for lower rates.
"The fact is, whether we like it or not, we want our banks to be profitable and safe, just like we want our airlines to be profitable and safe," Mr Hockey told reporters in Canberra.
He said the government did not understand what was going on in the bank sector, which has long been complaining about rising capital funding costs in offshore markets.
Assistant Treasurer Mark Arbib said Mr Hockey had time and again made excuses for the banks to raise interest rates.
"His performance this morning would've been a great application for a job at one of the banks," Senator Arbib said in a brief statement.
Meanwhile, ANZ on Monday said it would cut 1000 jobs from its 24,000-strong Australian workforce by September.
The banking sector has already lost 2000 jobs since the start of 2012, and the Financial Sector Union estimates another 8000 will go by the end of 2013.
The financial sector is shedding jobs at the same time as car markers are downsizing their workforces and aluminium giant Alcoa is mulling over the future of a plant in Victoria.
In parliament, Mr Hockey asked Ms Gillard whether she regretted referring to recent jobs losses "growing pains".
"Don't verbal me," she fired back.
"The sense that I have ever, have ever exhibited anything other than concern for Australians that have lost jobs is completely untrue.
"I am not having the shadow treasurer come in as part of the campaign of fear and misrepresentation by the opposition and pretend that is true."
Australian Greens MP Adam Bandt called for a finance-sector jobs summit following the ANZ announcement, saying the treasurer should get the banks around a table and work out a plan to ensure workers weren't being sacrificed for the sake of excessive profits.
"The banks are out of control, taking public support when times are tough and making huge profits then slashing their workforce," he said in a statement.
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