This paper reports on economic modelling designed to estimate labour market adjustment costs from policy reforms and other economic shocks. The reform modelled in this paper, as an illustration examining adjustment costs, is National Competition Policy (NCP) in the utilities sector. In the next section, previous approaches to modelling NCP reforms are considered and a new approach is advanced. The modelling tools used in our analysis are then described. These tools are the large-scale multiregional model, FEDERAL-F, and a regional labour market adjustment index (RELMAI). The RELMAI was constructed with the support of funds from a Rural and Regional Development Grant from the Department of Transport and Regional Services.