Fine Gael leader Mr Enda Kenny said he would revisit benchmarking if returned to government after the next general election.
Speaking at a Waterford Chamber of Commerce gathering earlier this morning, Mr Kenny said he would hold back on benchmarking payments until such a time as "real" service improvements were achieved.
Mr Kenny was outlining Fine Gael's post-election business policy.
He also indicated he would push through reform in three key areas of the economy: insurance, banking and the professions, saying that businesses would have to embrace a new culture that put service to the public before profit.
The would also be obliged to meet all EU and EPA environmental legislation on pain of "severe penalties".
"Fine Gael's proposals to business are aimed at streamlining the way the State engages with the private sector and ensuring that the manner in which the State manages its finances doesn't undermine the viability of private enterprise," Mr Kenny said.
"I recognise the rights that business have to trade and pursue opportunities for commerce without the heavy hand of the State undermining those efforts," he added.
"Business too must reflect on its responsibilities to the people it employs, the public that they service and the communities that they are rooted in."