More broadly, Ms Batty said women giving evidence to an inquiry, should not feel they are addressing a forum amid feelings of "unconscious bias".
Senator Hanson was appointed deputy chair of the inquiry when it was announced by the federal government in September.
The One Nation leader previously said she wanted to investigate women who lie about domestic violence in divorces, based on the alleged experience of her son.
The appointment wasn't endorsed by Ms Batty.
"We have a leading politician who has openly stated that women lie and exaggerate in custody issues," Ms Batty said, concerned that the inquiry was "already tainted".
"I would find that incredibly challenging to enter into an inquiry, where the person who sat opposite me, listening to my story and my experience, fundamentally doesn't believe me."
Senator Hanson's office has been contacted for comment.
About one woman a week dies at the hands of her male partner or ex-partner in Australia.
Ms Batty wants immediate government action to prioritise the safety of women and children.
While she does not discourage people from taking part in the inquiry, Ms Batty says it's crucial to work out ways to provide safe supports for participants and to raise concerns.
The latest action plan calls for a stronger response to family violence in the family law system, with effective legal help for the most disadvantaged among the measures.
Women's Legal Services Australia spokeswoman Helen Matthews said the difference between the latest plan and the inquiry was the structure.
"The difference as well is this inquiry was announced by the prime minister off the back off a senator making statements in which (she) accused women of lying," she said.
"What we are doing is setting up women to fail, we're setting up women to be judged."
The inquiry is expected to report back in 2020.
Five step plan calls for:
- Strengthening family violence responses in the family law system
- Providing effective legal help for the most disadvantaged
- Ensuring family law professionals have real understanding of family violence
- Increasing access to safe dispute resolution models
- Overcoming the gaps between the family law, family violence and child protection systems.
If you or someone you know is impacted by family or domestic violence, call 1800RESPECT on 1800 737 732 or visit 1800RESPECT.org.au. In an emergency, call 000.