She revisits the theme of past secrets and their effect on the future in her most acclaimed book, The Prosperous Thief (2002). Described as a "moral thriller," the novel traces a deadly secret from Holocaust-era Germany through three generations and three continents. The novel not only includes, as do all Goldsmith's works, lesbian characters, but also examines the relationship of Jews to the Holocaust and the poignancy of the immigrant experience as second and third generations lose access to their histories. Goldsmith's fluid style keeps the story active, so that even though the novel is ultimately an analysis of the grief of the immigrant, it has the page-turning intensity of a thriller.

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In 2003, The Prosperous Thief was shortlisted for the Miles Franklin Award, Australia's most lucrative literary prize given to a "novel or play portraying Australian life in any of its phases."

In an unusual turn of events, Porter was also shortlisted for the award in 2003, for her verse-novel Wild Surmise. Goldsmith said being shortlisted with Porter gave her "double the pleasure." Porter observed that the partners were not used to being seen as competitors. "We're very different writers. We have very different work habits and write very different books."

Goldsmith's success as a published novelist has allowed her to retire from all but the most personally interesting teaching jobs. An intensely dedicated wordsmith, she devotes three to four years to creating each of her novels, and her most satisfying classes relate to this painstaking process. The titles of her courses include "Are We There Yet? Writing the Second Draft of Your Novel" and "The Year of the Novel," where she meets with fifteen working writers for five one-day sessions over the course of a year to discuss progress and problems.

Goldsmith is a frequent guest at the Melbourne Writer's Festival and publishes regularly in such Australian journals as Westerly and Frictions. She has recently completed her sixth novel, The Real World.

Goldsmith lives in a Melbourne suburb.

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The work of Australian lesbian poet Dorothy Porter presents a cheeky challenge to a literary establishment whose poetry has often been defined by pretension and obfuscation.

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