Popular large hybrid vehicles favoured by families with more than two children, such as the Toyota Kluger or Mazda CX60, will be slugged with a 33 per cent “luxury” tax after Labor said it would tighten the definition of a fuel-efficient car.

In a move the industry slammed as a blatant revenue grab with no policy justification, Treasurer Jim Chalmers revealed the luxury car tax threshold for fuel-efficient vehicles would be cut from 7 litres per 100 kilometres to 3.5 litres.