Australia's most prestigious literary prize, worth $60,000, has been awarded this year to Michelle de Kretser for her novel The Life to Come.

It is the second Miles Franklin for de Kretser, who won in 2013 for her novel Questions of Travel, and the third time in the award's 61-year history that a woman has won more than once (Thea Astley won the Miles Franklin four times; Jessica Anderson won twice).

Michelle de Kretser accepted the award at a ceremony at Melbourne Writers Festival. ( ABC )

De Kretser won this year's award against a shortlist of six that included fellow previous winner Kim Scott (shortlisted for his novel Taboo), and reclusive outlier Gerald Murnane (touted by some as a prospect for this year's Nobel Prize for Literature, before it was postponed).

"I haven't really taken it in yet, what it means. … I feel very happy," de Kretser said.

The Life to Come is set in Sydney, Paris and Sri Lanka, where de Kretser was born. ( Supplied: Allen & Unwin )

The Life to Come is de Kretser's sixth title. In its patchwork of settings and stories, it features all kinds of writers and would-be writers, but revolves in particular around the recurring character of Pippa, an ambitious writer who has (per the novel) "grit, longing, imagination, a capacity for hard work, a measure of selfishness, a shot of insanity — in short, everything needed for greatness except talent".

Chairman of the judging panel, State Library of NSW Mitchell Librarian Richard Neville, said: "Sentence-by-sentence, it is elegant, full of life and funny. With her characteristic wit and style, Michelle de Kretser dissects the way Australians see ourselves, and reflects on the ways other parts of the world see us."

"I suppose what I was having a bit of fun with was the rise and rise of marketing in the world of publishing.

"I feel like the book that gets all the attention and the big marketing budget behind it is not necessarily the book that is great literature and is not necessarily the book that's going to last," de Kretser said.

Among contemporary Australian fiction writers, she cites Joan London (The Golden Age), Fiona McFarlane (The Night Guest) and Mireille Juchau (The World Without Us) as three whose work inspires her.

The Miles Franklin Literary Award was established in 1957 through the will and bequest of Stella Maria Miles Franklin, author of My Brilliant Career.

It is awarded each year to a novel "of the highest literary merit" which presents "Australian life in any of its phases".

Speaking of the role of literary prizes in the industry, de Kretser said: "They do get books into the news [and] they start conversations around books — and not just about books, but about other issues, like gender in prizes."

She also talked about the important financial role of prizes for writers, pointing out that "the average income for a book writer in Australia is between $12,000 and $13,000 per annum.

"So the money from any literary prize is always a lifeline for writers — it means you don't wake up at 3 in the morning worrying about the bills you have to pay. And it buys you time to write, which is a great gift.

"I think that's the reason Miles Franklin set up the prize. … She herself had found it so difficult to make a living as a writer, that she was determined to ease the way for other writers."