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The economic changes occurring within Australia during the 1970’s and early 1980’s have had varying influences on the demand and supply of labour in different Australian regions. By considering a case study the present paper has examined the different labour market adjustment responses to economic change at a sub state level compare with those occurring for Australia as a whole and outlines the types of spatial policies relevant for assisting in labour market adjustment. The Hunter Region in New South Wales is chosen as a case study since it is not only a large and complex economic region, by Australian standards, but has also had to cope with considerable change, through the development of its energy resources and through the rationalisation of its steel and associated processing industries. The paper concludes that a number of general and region specific forms of labour market intervention are worthy of further consideration. In particular measures designed to improve the intra-regional mobility of labour are seen as important for improving regional labour market adjustment to economic change. Some of these measures include reducing the time delay in training for particular skills in demand, the continuation of training for out-of-trade apprentices, and reducing the various barriers to inter occupational mobility.