Labor could have sought zero backpack tax

Shadow treasurer Chris Bowen says it was open to Labor to call for the backpacker tax to be set at zero per cent.

Mr Bowen said he agreed with former Howard-government treasurer Peter Costello that the backpacker tax wasn't the greatest ever contribution to fiscal repair.

He said the 15 per cent tax rate, set following a lengthy debate last week, was uncompetitive as it was higher than the rate in New Zealand and 10.5 per cent was a good compromise, while 13 per cent was a further compromise.

"Well, it was open to us to say we wanted zero on the backpacker tax," he said on ABC television.

The government only got the 15 per cent backpacker tax through the Senate with support of the Greens, agreeing to provide an additional $100 million funding for Landcare.

"I offered an arrangement that was the 13 per cent tax rate. He (Treasurer Scott Morrison) said no it would cost too much and be too expensive and entered into a deal with the Greens that cost $100 million more," Mr Bowen said.