We loosened the rules in 2009 to include Nam Le's virtuosic collection, The Boat. Since then several collections have pushed their way to the top among the novels. We're happy to recognise the renaissance of short fiction – partly a response to our busy lives, and also an overdue return to the fine art of the miniature favoured by many writers from Anton Chekhov to Alice Munro.

With my fellow judges, writers Angelo Loukakis and Maxine Beneba Clarke (a 2015 winner for her story collection Foreign Soil), I read some impressive novels among this year's 14 entries – fiction published last year by writers aged 35 and under – but we all agreed that Middleton's and Ulman's work was outstanding for its originality and polish.

"I've always loved stories. I love their intensity, the way you can experience a whole narrative in an hour before bed," says Ulman. "I have a very internet-addled brain. Stories are good for this moment in time because there are no boring bits." But she also acknowledges, "They are a training ground for the novel. I wanted to experiment with voice and form before I commit to a story for a whole book."

Short stories are still not easy to sell. Middleton was only the second short story writer to win the Vogel's Award and the publisher asked the judges if they were sure they wanted to go with stories. They were. Middleton thanks Nam Le for restoring interest in stories with the risky ambition of The Boat.

This is the 20th year of the Herald's awards, which I started to showcase a flowering of talent, and it is astonishing to realise that some of the 82 winners are now in their 50s. Many are among our most admired writers: James Bradley, Mandy Sayer, Christos Tsiolkas, Gillian Mears, Craig Silvey, Emily Maguire, Markus Zusak, Hannah Kent to name a few. We take no credit for their success but share a great deal of pride in their contribution to Australian writing.

Abigail Ulman

"Amelia couldn't finish her book, so she decided to have a baby. She got pregnant with a gay friend, and waited six weeks to make sure it was actually happening." From Hot Little Hands (Hamish Hamilton).

What the judges say: Ulman has a talent for voice, situation and characterisation in stories that are erotic (sometimes "transgressive"), international and urban. Each piece of ordinary realism teeters delicately on the edge of the dangerous, extraordinary, or surreal. Ulman manipulates the reader into extraordinary emotional investments, with the maturity and confidence of a writer beyond her years.

Awards shortlistings: Readings Prize for New Australian Fiction, Melbourne Best Writing Award, Adelaide Festival Award for Fiction, UTS Glenda Adams Award for New Writing.

Work in progress: A novel ("I think") about women in their late 20s to mid-30s.

Day job: Freelance copywriting two days a week.

Ulman was 15 when she first read The Best American Short Stories, an annual fiction anthology, and fell in love with American writing. "I thought who are these people, how do they do that?" It was a fateful encounter.

Ulman's first book, Hot Little Hands, was partly written during a fellowship at Stanford University in California. The nine stories are about girls in their teens and 20s, American or Australian, a mixture of droll knowingness and naivete, on the brink of dangers that range from kissing the wrong boy to deportation and worse. One quietly chilling story grew out of library research into sex trafficking.

The stories are "not autobiographical but they are emotionally autobiographical. People assume I'm in my 20s, and I was when I wrote some of the stories," says Ulman, who lives in central Melbourne and won't specify her age beyond "mid-30s" because the world is weird about women and ageing. People feel they can give you unsolicited advice". She speaks with the warm, amused tone you might expect from her writing.

"You know that romantic comedy 13 Going on 30? That's how I feel," she says. "Mum had four kids under eight when she was my age. I love pop culture, pop music, celebrity culture, I have three nieces I connect with, and I have to amalgamate all that with my more serious literary side."

Several publishers contacted Ulman in 2008 after she published Chagall's Wife – the first story in the book – in the journal Meanjin. She wanted to work with Ben Ball at Penguin, who had just published The Boat by Nam Le, but she held off signing a contract until two years later.

"Then the pressure started. I thought it would take six months to finish and it took three years. Some of the subject matter is risky and knowing someone was waiting for it stopped me."

Ulman was raised with three sisters in a secular Jewish household in Melbourne, where their father worked at a rehab hospital and their mother taught English and now writes short stories.

None of the girls inherited a "sciencey brain", says Ulman, who published her first stories as a teenager. She studied film, theatre and writing for a Bachelor of Creative Arts at Melbourne University and says, "I thought I wanted to be a performer but I would come into class and sit in a corner, so I ended up focusing on writing."

For more than a year she worked on a novel – endlessly rewriting the first chapter – and then bought a one-way ticket to south-east Asia for research and went on to New York, Paris and Cairo. "By the end I had a travel journal and lots of postcards but no fiction."

So she came home, applied for graduate writing programs in Australia and the US, and kept writing. Three days into a Masters degree at Melbourne University, she got the call to say she had the Wallace Stegner Fellowship at Stanford. The two-year program was "life-changing", paying her to live in the San Francisco Bay area, write and attend a weekly workshop with nine other fellows.

"It was not about agents and publishing, just the work," she says. "It felt as if the short story was the most important thing in the world. I had always thought maybe I wanted to be in a band, make documentaries and write books, but all the others were just writers.

"My workshop mates wouldn't let me get away with anything. I love character, voice and atmosphere but I'm not very plot focused. People would challenge me: 'would your character say that?' They made me a much better writer, and I still have their voices in my head."

Ulman's book is published in Germany and will soon be out in Britain and the US. She remains a fan of American writers such as Junot Diaz, Lorrie Moore and Mary Gaitskill – all known for their short stories, and all "forthright, funny, colloquial and daring", much like Ulman.

Murray Middleton

"Les Holcombe explained the lyrics of the Beatles' song Norwegian Wood to the bartender at the Farmers Arms while his wife Sylvia pretended to survey the interior of the pub. Les had always been good with strangers." From When There's Nowhere Else to Run (Allen & Unwin).

What the judges say: Middleton's writing is deliciously lean and exquisitely polished. He herds the reader across the unfolding landscape of contemporary Australia without sentimentality or cliche, and looks for the poignant depths, uncertainties and yearnings beneath the unpolished surface of ordinary Australian life.

Awards: The Age Short Story Award, Vogel's Literary Award.

Work in progress: A novel about young Africans making a new life in Melbourne.

Day job: Part-time academic support for dyslexic students at the Victorian College of the Arts.

The biographical note in Middleton's book says he was born with fractured hips in 1983, spent his first three months in plaster and has broken most bones since. Asked why he chose these poignant details, he explains: "In the absence of a mass of awards and publication in X languages, I had to say something."

A difficult birth, his own clumsiness and many surgeries left him unable to touch his right shoulder with his right hand (his friends' favourite party trick) and with one short leg. "To even me out you have to put The Brothers Karamazov under my right foot."

At 32, Middleton says his problems made him shy but also gave him the writer's gift of empathy with outsiders. And, it seems, they didn't damage his sense of humour.

The son of English-born academics, Middleton grew up in Melbourne "surrounded by books and I hated them. The only books I read before I was 18 were by John Marsden".

After school he took a gap year in Byron Bay, where he took retail jobs, swam and read. "It was the first time I got some momentum. One book flowed into another."

During a professional writing degree at Deakin University he wrote his first four short stories, one of which survives in his collection, When There's Nowhere Else to Run as Big Buffalo, about a financial planner's regular trysts in a motel. All Middleton's characters are in quiet crisis; there are divorces, deaths, desertions, bushfires, though the plots are often elliptical and unresolved. "A lot of my stories are set in the aftermath," he says.

The Fields of Early Sorrow, in which a newspaper editor drives his sister through rural NSW to some kind of clinic, won the 2010 Age Short Story Award, which inspired Middleton to keep writing, despite being dirt poor. He spent the prize money on a train trip across the Nullabor Plain with a group of Anzac veterans – the seed of another story.

He also had his first "crack" at the Vogel's Literary Award (for an unpublished manuscript by a writer under 35) that year, writing 60,000 words in 18 months. "The only positive from that was I proved I could finish," he says.

He won the Vogel's on his third crack last year with When There's Nowhere Else to Run. "The Age prize affected my sense of self and the Vogel changed my life," he says. "I thought I'd write until I dropped but I never assumed I'd have any success."

As part of his prize he was mentored by short-story writer Cate Kennedy and says, "I reckon I learnt more in 3½ months with her than in four or five years at uni. She flogged me."

Kennedy advised him, for example, to change a story about a hit-and-run accident from past to present tense to make it more immediate. "The best description I've had of that story is that it's like reading with a finger up your bum," he says.

Living in inner Melbourne, writing for four or five hours each morning, cycling to his job, Middleton says his life is "as close as it has ever been to having balance". He is halfway through a novel based on the Somali and Sudanese kids he encountered working in inner-city schools.

"Your first book is great – you write about the burning ideas you want to get out, " he says. "Your second book is the most important – it's what you really want to say."

Murray Middleton and Abigail Ulman will discuss their work with Maxine Beneba Clark and Susan Wyndham at the Sydney Writers' Festival, 11.30am, Saturday May 21 in Sydney Dance 2, swf.org.au.

The Sydney Morning Herald Best Young Australian Novelists 1997-2016

2016

Murray Middleton, When There's Nowhere Left to Run

Abigail Ulman, Hot Little Hands

2015

Michael Mohammed Ahmad, The Tribe

Ellen van Neerven, Heat and Light

Maxine Beneba Clarke, Foreign Soil

Omar Musa, Here Come the Dogs

Alice Pung, Laurinda

2014

An Elegant Man by Luke Carman

Inheritance by Balli Kaur Jaswal

Burial Rites by Hannah Kent

The Night Guest by Fiona McFarlane

2013

Romy Ash, Floundering

Paul D. Carter, Eleven Seasons

Zane Lovitt, The Midnight Promise

Emily Maguire, Fishing for Tigers

Ruby J. Murray, Running Dogs

Majok Tulba, Beneath the Darkening Sky

2012

Melanie Joosten, Berlin Syndrome

Jennifer Mills, Gone

Rohan Wilson, The Roving Party

2011

Lisa Lang, Utopian Man

Gretchen Shirm, Having Cried Wolf

Kristel Thornell, Night Street

2010

Kalinda Ashton, The Danger Game

Andrew Croome, Document Z

Emily Maguire, Smoke in the Room

Craig Silvey, Jasper Jones

2009

Nam Le, The Boat

Alice Nelson, The Last Sky

Kevin Rabalais, The Landscape of Desire

Steve Toltz, A Fraction of the Whole

2008

Belinda Castles, The River Baptists

Max Barry, Company

Jessica Davidson, What Does Blue Feel Like?

Jessica White, A Curious Intimacy

2007

Will Elliott, The Pilo Family Circus

Tara June Winch, Swallow the Air

Danielle Wood, Rosie Little's Cautionary Tales for Girls

2006

Stephanie Bishop, The Singing

Leigh Redhead, Rubdown

Tony Wilson, Players

Markus Zusak, The Book Thief

2005

Nicholas Angel, Drown Them in the Sea

Corrie Hosking, Ash Rain

Andrew Humphreys, Wonderful

Leigh Redhead, Peepshow

Craig Silvey, Rhubarb

2004

M.J. Hyland, How the Light Gets In

Louise Limerick, Dying for Cake

Mardi McConnochie, The Snow Queen

Nerida Newton, The Lambing Flat

Matthew Reilly, Scarecrow

Danielle Wood, The Alphabet of Light and Dark

2003

Emily Ballou, Father Lands

Sonya Hartnett, Of a Boy

Sarah Hay, Skins

Chloe Hooper, A Child's Book of True Crime

2002

Tegan Bennett Daylight, What Falls Away

Stephen Gray, The Artist Is a Thief

Andrew Humphreys, The Weight of the Sun

Irini Savvides, Willow Tree and Olive

2001

Sonya Hartnett, Thursday's Child

Malcolm Knox, Summerland

Hoa Pham, Vixen

2000

James Bradley, The Deep Field

Julia Leigh, The Hunter

1999

Georgia Blain, Closed for Winter

Bernard Cohen, Snowdome

Raimondo Cortese, The Indestructible Corpse

Lisa Merrifield, Mrs Feather and the Aesthetics of Survival

Camilla Nelson, Perverse Acts

Elliot Perlman, Three Dollars

1998

James Bradley, Wrack

Bernard Cohen, The Blindman's Hat

Luke Davies, Candy

Delia Falconer, The Service of Clouds

Anthony Macris, Capital: Volume One

Clare Mendes, A Race Across Burning Soil

David Snell, The Illustrated Family Doctor

Emma Tom, Deadset

1997

Bernard Cohen, Tourism

Matthew Condon, The Lulu Magnet

Fotini Epanomitis, The Mule's Foal

Catherine Ford, Dirt and Other Stories

Andrew McGahan, 1988

Fiona McGregor, Suck My Toes

Gillian Mears, The Grass Sister

Mandy Sayer, Mood Indigo

Christos Tsiolkas, Loaded

Beth Yahp, The Crocodile Fury