The federal government has tasked the Productivity Commission with devising a plan to improve Australia's low rates of female workforce participation and create a sustainable childcare system.

But at a University of Sydney workshop on Friday, academics revealed that under the commission's proposals, which would encourage an extra 47,000 mothers to join the workforce, many would be discouraged from working more than two days a week.

Wendy Craik, who is heading the Productivity Commission review into future options for childcare, has proposed a new means-tested system under which higher income workers would get a lower subsidy.

Marian Baird, from the University of Sydney Women and Work Research Group, said under the new model, women who worked more than two days a week would see their extra income eaten up by a higher marginal tax rate and reduced childcare subsidies.

"We should try to shift the model so the marginal tax rates don't spike on the third day because we know from our research that women returning to work after maternity leave prefer three to four days," Professor Baird said.

"If the aim is to get more women to work there is a huge disincentive to women participating because economically, for many women it doesn't make sense to go to work for more than two days. Furthermore, quality work for those two days is difficult to find."

Dr Craik, who was speaking at a workshop hosted by the University of Sydney group on Friday, said she would take another look at the modelling.

Rae Cooper from the university's business school said she was alarmed the gender pay gap had increased to more than 18 per cent after hovering about 17 per cent for about 20 years.

She said Australian Bureau of Statistics figures released this week showed women were going backwards.

"It is really alarming to see the gap between men's and women's pay heading in the wrong direction," she said.

Associate Professor Cooper said labour force participation rates for women, particularly mothers of young children, were substantially lower than most comparable OECD countries including Canada, the US and New Zealand.

A proposal for taxpayer-subsidised nannies has also come under fire at the Productivity Commission’s public hearings into childcare, with the Independent Education Union raising concerns about safety and quality.

Verena Heron, an industrial officer with the NSW Independent Education Union, said while nannies would be required to have a Certificate III qualification to be eligible for a subsidy under the commission’s proposal, ‘‘there is very little other regulation about what might occur in the home’’.

Vicki Geach, child and family services manager with Wyong Shire family day care, supported the nannies proposal but agreed that greater regulation would be required to ensure children received quality education and care.

Ms Geach told presiding commissioner Jonathan Coppel that the Productivity Commission’s proposed activity tested childcare subsidy would put children from vulnerable families at risk.

‘‘They would go underground if they couldn’t afford to get any kind of childcare,’’ she said. ‘‘The vulnerable families are the ones we need to be visible in the community so someone is making sure they are getting what they need.’’