"It is also a very worrying precedent. [Australian Immigration Minister] Peter Dutton has made an art form out of the deportation of New Zealanders over the age of 18 in recent years. He now appears to be starting on those who are minors," Barns said.
The teenager has a hearing next week to review Dutton's decision and can then appeal to the Federal Court.
"It may be some months before his case is resolved. The outrage of this case is that the minister is using ... provisions to be used sparingly and designed for people who have committed extremely serious crimes over a long period of time. It is not designed for a child," Barns said.
Peters has challenged the Australian Government to meet the obligations of the UN Convention on the Rights of the Child over the detention of the 17-year-old.
The youth is being held under a section of the Migration Act which provides for deportation where someone on a visa is deemed a potential risk to the community.
It is against the convention to detain youth alongside adults in adult facilities or to deprive them of contact with family.
Peters said Australia had the sovereign right to decide on domestic issues, but both New Zealand and Australia were signatories to that convention.
"This person is a child, or a minor and I'm just reminding the Australians 'you're a signatory, live up to it'.
"They are clearly in breach of it. There's no complication. They know that, we know that."
Peters said the Government had already made its displeasure about that case, and the wider deportation policy, clear to the Australian Government.
He would see Australia's Foreign Minister Julie Bishop in Australia in August and would again voice his concern.
"The Australians are very aware of what our views are on that and the expulsion of so many New Zealanders from Australia, some of whom have only been in New Zealand for their total lives for three or four years."
Australia also introduced a new hardline policy in December 2014, allowing the deportation of non-Australian citizens who have served sentences of more than 12 months back to their homelands.
There are also provisions for deportation on character grounds, if somebody is deemed a danger to the community.
Both the National and Labour governments have tried to get Australia to drop or soften the policy when it comes to New Zealanders but it has refused to do so.
The deportations were initially restricted to those over 18.
The only concession gained was for the length of time a potential deportee had lived in Australia to be taken into account when appeals against deportations were held.
