"Up until now services have been held together by specialists giving priority to meeting patients' clinical needs at the expense of their supervising, training and leadership roles.
However, this is not safe and services will be cut if the shortage is not addressed, he warned.
"It is limiting the training and experience of our future specialists, it is hugely wasteful, and is contributing to a high turnover of both resident [junior] doctors and specialists," Mr Powell said.
"Unless there is an urgent quantum leap towards addressing our retention crisis, we are approaching the point where there is no option but to cut clinical services."
Labour party health spokeswoman Maryan Street said New Zealand's standard of hospital care would drop as a result of specialist staff shortages.
"Current and projected shortages of medical specialists are of great concern to New Zealanders.
"They deserve to know that if they fall seriously ill, they will have access to the best possible care.
Ms Street warned New Zealand's elderly would be first in the firing line.
"As our over 65s increase in number, with more and more complex conditions, more specialists are going to be required.
"On top of that, 19 per cent of our current specialists are due to retire in the next five years.
She called on the government to fix the staff shortage, which was outlined three years ago.
"Health Minister Tony Ryall said in 2010 that the shortage of specialists was a major priority and yet there has been no discernible improvement in the rate of recruitment and retention of specialists since that time.
"It's time this Government stopped talking about the problem and took action," Ms Street said.
Green Party health spokesman Kevin Hague said the health sector was facing a "looming crisis" due to demands on senior doctors.
"It will cost more in the long run to pay the increasing cost associated with patients needing to come back to hospital and to cover high rates for locums used to plug staffing holes.
"This National Government is focused on short-term savings but they are not real savings and will cost more in the long run," Mr Hague said.
Mr Hague accused Mr Ryall of disguising the scope of the issue.
"Tony Ryall continues to be dishonest about the number of specialist doctors and attacks the association for telling the truth.
"The Health Minister should stop spinning the facts and implement the plan to secure a safe and sustainable specialist workforce developed jointly by District Health Boards and the Association in 2010."
