Leading economist Ross Garnaut says failure on the part of Treasury and government meant Australians should prepare for some 'shocking realism' about the state of the budget and has cautioned against 'easy' answers for reform like tax cuts for big business.

But Prime Minister Malcolm Turnbull has a chance to come clean about the true state of the federal budget, he said

Economist Professor Ross Garnaut says the only practical solution to Australia's gas crisis is to force all three LNG projects in Queensland to cut back their exports. Credit:Jesse Marlow

The case for company tax cuts for large business had not been subject to "rigorous analysis," Professor Garnaut said, saying it was important any budget decisions were based on a strong economic case.

"Let us be careful not to exacerbate a dreadful budget problem in our search for productivity gains," he said at the The Australian Financial Review Workforce and Productivity Summit.