Scott Morrison admits the banking royal commission should have been held earlier but the coalition is refusing to bring parliament back for extra weeks to fix financial laws.
Labor leader Bill Shorten has asked for two extra sitting weeks in March to ensure changes are made in response to the banking royal commission before voters go to the polls in May.
"It's critical that these changes are legislated as soon as possible and I request that you recall both house of parliament," Mr Shorten wrote on Tuesday.
Labor wants to expedite the commission's recommendation to end grandfathered commissions for financial advice and change laws to ban hawking of superannuation and insurance in line with other recommendations.
"We won't be lectured by Bill Shorten, who still hasn't outlined which recommendations Labor would implement," a government spokesman said.
The coalition has said it will "take action" on all 76 recommendations and says legislation is already before parliament to deal with increased penalties for white collar crime, the Protecting Your Super legislation and increased powers for regulators.
Prime Minister Scott Morrison says he was concerned about what a banking royal commission would do to the economy. Source: AAP
The government also plans use the remaining parliamentary time to establish the compensation scheme of last resort, and extend the jurisdiction of the federal court.
"The Labor Party knows that we will have to deliver the budget in early April, and in the context of that timetable we have the appropriate number of sitting weeks," Finance Minister Mathias Cormann told ABC News.
Parliament will sit for two weeks in February and the April budget week, before the federal election is held.
Mr Morrison played down Labor's call for extra weeks, but repeated his regret about delaying calling the royal commission, which handed down its final report on Monday.
"I expressed my regret last year, and I meant it. But we just got on with it. Australians know it's about the action that you take," he told reporters in Townsville.
The prime minister says he had a responsibility to the economy.
"I was being very careful - you could accuse me of being overly cautious," Mr Morrison said.
"I was concerned in particular about what it could mean for credit restrictions in the economy and how that could slow the economy down."
Former prime minister Malcolm Turnbull conceded he was wrong to oppose the royal commission while he led the government.
"It was started perhaps 18 months later than it should have been," he said in Melbourne.
The coalition government relented to pressure to call the royal commission in late 2017, after calling it an unnecessary "populist whinge".
Mr Shorten also called on the coalition to ask banking executives to consider their positions.
"They've got to make sure that the people who have been running these banks face the full consequences of their civil and potentially criminal mistakes," Mr Shorten said.
Despite the commission's damning findings, neither side of politics has ruled out accepting donations from the big banks.
