Former treasurer Peter Costello has criticised members of Federal Parliament for wasting so much time debating the backpacker tax.

Key points: Backpacker tax "not a major economic issue" and won't impact budget deficit, Peter Costello says

Backpacker tax "not a major economic issue" and won't impact budget deficit, Peter Costello says Former treasurer says rise of One Nation, other small political parties "won't be good for the country"

Former treasurer says rise of One Nation, other small political parties "won't be good for the country" Donald Trump's threat to back out of TPP should not concern Australia too much, Mr Costello says

Prime Minister Malcolm Turnbull last week lauded the passage of the tax as proof Parliament was working, however Mr Costello said it was irrelevant to the overall budget.

"This is a country that worked itself up into a lather over a backpacker tax, for heaven's sake," Mr Costello told 7.30.

"This is not a major economic issue. The budget's in deficit. The backpacker tax isn't going to touch the sides, and yet we wasted a whole week in Parliament in relation to it.

"Why? Because in that Senate, every rogue on the left or the right or in the centre now counts and there's going to be horse trading. It's not edifying but it's the way Australia is."

He said the rise of One Nation and other small political parties in the Senate "won't be good for the country".

Mr Costello said the One Nation of today was different from the party it was 20 years ago, when he was treasurer.

"One Nation has now mainstreamed itself, that's the difference," he said.

"One Nation now has several senators and the balance of power. When I was in office we were focused on making sure it didn't mainstream itself."

Mr Costello said it was possible the "major parties left a bit of a vacuum", which One Nation and minor parties came and filled.

"Xenophon's managed to do the same thing. Derryn Hinch has managed to do the same thing," he said.

"In my own view it won't be good for the country because it means decisions will be horse-traded. Things that have nothing to do with an issue at hand will be tacked onto bills."

Trump creating 'opportunity for us and China'

Mr Costello said US President-elect Donald Trump's threat to back out of the Trans-Pacific Partnership (TPP) should not concern Australia too much, as there was still the Regional Comprehensive Economic Partnership (RCEP) trade agreement of which Australia and China were a part.

"Donald Trump has made it clear he will kill that [TPP] trade agreement," he said.

"If the US wants to walk away from an agreement which it largely negotiated, the Chinese have an opportunity to step in with an agreement which they have been fathering. Australia has been part of both.

"If the US doesn't want to be part of promoting freer trade in the region and China does, there's an opportunity for us and for China."