Prime Minister John Key has confirmed a funding commitment so work on Auckland's City Rail Link can start in 2018 - two years earlier than the current plan.

In his first formal speech of the year, Mr Key told Auckland Chamber of Commerce the government had formalised its spending on the project.

Photo: RNZ / Diego Opatowski

Read the full speech here

"It's become clear that we need to provide certainty for other planned CBD developments affected by the rail link," Mr Key said.

"This means we see merit in starting the project sooner."

Transport Minister Simon Bridges said this meant a major part of the project, the tunnelling under downtown Auckland, would start in 2018, two years earlier than currently planned.

The 3.4km rail link will run from Britomart Station in downtown Auckland, through the central business district to connect with the existing western line at Mt Eden station.

In the past the government has been reluctant to fully commit to the funding required to start the project at the time the Auckland Council wanted, saying the case did not stack up.

Today it said its commitment had been driven by "strong growth in rail patronage and the need to provide investment certainty for large scale developments" in the city.

In his speech, however, Mr Key said there were still details to be sorted out.

"We still need to work through a number of important and quite complex issues with the council.

"These include how project costs will be finally shared between the government and the council and how the rail link will be owned and managed.

"Providing these issues are resolved - and I'm confident they can be - we'll aim to finalise the business plan later this year."

Look back at John Key's speech here:

Reaction to the Prime Minister's speech has been coming in on Twitter:

The #CityRailLink & National: First they ignore you (Williamson) then they laugh at you (Joyce) then they fight you (Brownlee) then you win. — Sudhvir Singh (@sudhvir) January 26, 2016

Mr Key also said the government would streamline the consenting process for the East-West roading project in Auckland, so that construction could start sooner.

"This is a large and complex project.

"It's a priority for Auckland because it will improve travel and freight times in this busy part of the city. It will also provide much better access between the Eastern Suburbs and the Airport."

Subject to approval, this means construction could start as early as 2018, with a price tag of between $1.25 billion and $1.85 billion.

Photo: RNZ/Kim Baker Wilson

Auckland Mayor Len Brown welcomed the announcement, saying the government had delivered the funding certainty he had been asking for since 2012.

Auckland needed the project to happen if it was to achieve its goal of being the world's most liveable city, he said.

Mr Brown had championed the City Rail Link project since his inaugural Auckland mayoral campaign in 2010 and today expressed confidence government support would eventually become complete, as rail patronage grew sharply.

"My view was that at some point the people of Auckland would speak for themselves, vote with their feet, get on the train and persuade the government with their actions, and that's what they've done."

Employers and Manufacturers Association chief executive Kim Campbell said the government had recognised the political reality of not fully committing to the project

"What was obvious to everyone else I think has frankly become a vote-costing thing for the government. They realised the people of Auckland have had enough of procrastination, they want to see things happening."

Photo: RNZ / Alexander Robertson

Labour Party leader Andrew Little said it was typical of the government that it had to be dragged kicking and screaming to the point that it realised the City Rail Link should be built sooner.

Mr Key's failure of ambition had been holding back growth and prosperity in Auckland for years, he said.

"His speech today featured only a last-minute announcement of something the rest of New Zealand has been calling for for years.

"Where was his vision for how to tackle the big issues our country is facing?"

Photo: RNZ / Mohamed Hassan

Green Party transport spokesperson Julie-Anne Genter said the City Rail Link should mark a shift in Auckland away from the 1950s model of only building motorways and roads, towards investment in clean, reliable and modern public transport.

Unfortunately the government's other transport projects showed they still did not understand how to create a balanced transport system, she said.

"The National Government continues to spend billions on a few gold-plated motorways.

"It should be aiming to complete Auckland's rapid transit network first, which would leverage off the CRL and complement the road network."

ACT Party leader David Seymour said the government should also step up by funding education infrastructure in the same way it boasted about funding the City Rail Link.

Epsom Girls Grammar needed more classrooms to absorb demand and the Auckland Grammar community had just had to fund raise two thirds of the cost of a new classroom block, he said.

Mr Key also announced $115 million to fast track projects in other regions, including the Mt Messenger and the Awakino Gorge Tunnel bypasses in Taranaki.

That funding will also fast track the Motu Bridge replacement on State Highway 2 between Gisborne and Opotiki, and the Opawa Bridge replacement in Marlborough.