Noelle Martin, a lawyer and survivor of online abuse, told a parliamentary committee the planned laws were narrowly targeted.
She said the proposed financial penalties for tech companies failing to keep people safe on their platforms are "chump change" and will not result in meaningful reform.
"If this committee is serious about online safety, unmasking trolls and improving responsibility by social media companies ... this bill contains fundamental flaws," she said at a hearing on Tuesday.
As a teenager, Ms Martin discovered images of herself had been edited onto pornographic pictures and distributed online.
Almost a decade later, the perpetrators have not been punished and many of the fake images remain on pornographic websites.
Ms Martin said the government should focus on compelling the e-Safety Commissioner to use its existing legislative powers to take action against abusive content online.
"Australia's online safety laws and reforms, and in particular the office of the e-Safety Commissioner, are woefully inadequate," she said.
"The regulator continues to under utilise its existing statutory powers, misguides the public on its perceived successes ... and the whole regime is ineffective in providing meaningful support to survivors."
Meanwhile anti-trolling campaigner and journalist Erin Molan shared her experience of being repeatedly targeted with abusive direct messages on social media.
Ms Molan became emotional as she recounted some of the abuse which made her fear for her life and her young daughter's safety.
She said it was almost impossible to get help from law enforcement or the social media platforms themselves.
"I reported some horrific messages from an account that kept being recreated no matter how many times I blocked it, but Facebook said the messages 'didn't meet the threshold' for inappropriate content," she said.
"The consequences should lie with big tech. They generate a huge amount of money and with that comes the responsibility to ensure users are safe."
Criminologist Michael Salter told the committee Ms Molan's experience of reporting abuse to social media companies was common among victims.
He said victims are often failed by the lack of action taken by social media giants.
"We're asking for transparency because far too often what we're provided from social media company reports on these issues ... is statistics that are most friendly to them," he said.
"Having basic safety expectations built into platforms from the get-go is not too much to expect from an online service provider."
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