Austrian here.
There were 3 parties in the coaliton talks. ÖVP - christian conservatives SPÖ - social democrats NEOS - liberals
Theoretcally ÖVP and SPÖ have a majority, but it is too slim for their tastes.
There were two possible junior candidates - NEOS or Die Grünen (Green Party) The current government is ÖVP and Greens.
From my understanding of the news of today the 3 parties stances are as following:
NEOS: Blame SPÖ for not being willing to make sacrifices to enhance the economy. SPÖ: Blame the other parties for not considering any form of wealth/inheritance tax.
The thing was "controversial" from the start because the party with the most votes, the FPÖ (far-right) was not included in the talks. SPÖ and NEOS were never considering them, but the ÖVP leadership only talked about their head (Herbert Kickl) being too far right the rest of the party being "reasonable". The FPÖ has had numerous neo-nazi scandals over the past 50 years. https://de.wikipedia.org/wiki/Liste_rechtsextremer_und_neonazistischer_Vorf%C3%A4lle_in_der_FP%C3%96
The discrepancy for the three parties is too big to make meaningful change, they do not aree on core policies like immigration and economic direction. So NEOS canceled the talks today.
The result will be FPÖ - ÖVP so a right government OR their might be another election but everybody knows that FPÖ will get an even bigger share of the votes.
IMO the options were grim from the start. A limp government of some fiddling with taxes and slowly empoverishing the population or a hard-right coalition of nationalist & protectionist economic redistribution to the top. Life will be worse here for the foreseeable future.