It means 'which isn't acceptable'. I am also confused as to why they used this turn of phrase, perhaps to sound more colloquial. It sounds weird to me too, and comical, coming from a govt department, but perhaps it is indicating that the privacy commission finds that to be something the population would not approve of, but which it has no actual enforcement mechanism.
ANZ governments are a little less officious than other countries (the lack of taking ourselves seriously is a defining trait). The article also mentions a "she'll be right attitude".
