Opposition Liberal Sen Cory Bernardi said the robbery showed the burka was "emerging as the preferred disguise of bandits and ne'er-do-wells".
Both PM Kevin Rudd and Liberal leader Tony Abbott dismissed the comments and said they would not support a ban.
The row follows similar debates on the burka in European countries.
Last week, Belgian politicians voted for a ban which would outlaw the full-face veil in public.
Mr Bernardi, senator for South Australia, made his comments after a man was held up at gunpoint in a car park in Sydney on Wednesday and robbed of a bag of cash.
The victim said his attacker had been a man wearing sunglasses and a burka, meaning he could not be identified.
Writing in his blog, Mr Bernardi said the burka was "un-Australian" and should be banned on safety grounds and for the good of society.
"To me, the burka represents the repressive domination of men over women which has no place in our society and compromises some of the most important aspects of human communication," he said.
"It also establishes a different set of rules and societal expectations in our hitherto homogenous society."
'Confronting'
Mr Abbott said party member Mr Bernardi was "entitled to a personal view" but that he did not personally support the idea of a ban.
"I think a lot of Australians find the wearing of the burka quite confronting and I wish it was not widely worn," he told ABC News.
"But the point is we don't have a policy to ban it and we have always respected people's rights in this area."
Mr Rudd has accused the opposition of expressing contradictory views on the issue.
"He [Bernardi] goes out there and says that's what he wants to do. Mr Abbott then says it's not their policy," he told the Seven network.
"They are walking both sides of the street.''
Belgium's lower house of parliament voted unanimously last week for a law banning the public wearing of any clothing that obscures the identity of the wearer.
If passed by the country's senate, the ban would be the first move of its kind in Europe. France is close to introducing a similar ban.
BBC News
