Western Australia has announced a suite of asset sales including the sale of the Fremantle Port Authority and state-owned gambling body TAB in an austere budget that will see the state’s deficit double to $2.7bn and net debt climb to $31bn.

The budget also confirmed the establishment of a no-fault insurance scheme, which will see a fee of up to $99 applied to all vehicles registered in WA to fund long-term care for people “catastrophically injured” in a car accident.

The treasurer, Mike Nahan, said a sharp fall in state revenue, driven by falling iron ore and oil and gas prices, and the low GST allocation had created the most difficult economic circumstances in recent memory.

“This is a budget framed in difficult times,” he said. But he said the lag in calculating GST relativities should see WA’s share “come roaring back” to a more than 100% share over the forward estimates, which would see the state return to surplus in three years.

Nahan said the state hoped to make between $3bn and $5bn from the asset sales, which also include the sale of renewable energy assets from two state-owned power companies, the $5bn loan book for low-income home loans program Keystart, the Forests Products Commission, and the sale and lease-back of the state vehicle fleet and several government-owned buildings.

That money would be put toward paying down state debt in an effort to restore the state’s AAA credit rating or, at least get it off Standard & Poor’s credit watch list.

The premier, Colin Barnett, telegraphed the possible sale of the TAB in February, after previously appearing to back down from the politically unpopular move. The sale has not been widely supported by coalition partner the National party, but leader Terry Redman indicated on Thursday its support would be qualified on whether the move disadvantaged rural West Australians.

The sale of Fremantle Port Authority would see the land, plus Landcorp held assets in Kwinana tied to the potential development of the outer harbour, given up on a 49-year lease. Nahan said the sale was likely to include a deal to build the outer harbour, which will be needed when Fremantle port reaches capacity in about a decade, but the Maritime Union of Australia has already said it opposes any sale.

He denied the asset sales were a response to federal government pressure for WA to reform its economy in response to a $499m one-off payment, handed down this month as compensation for the state’s low GST allocation.

Nahan said the payment, which was confirmed after the budget was closed off, in effect reduced the state’s 2014/15 deficit from $1.3bn to about $800m.

Nahan said the state was facing its most difficult economic circumstances of recent memory, spearheaded by a rapid fall in iron ore and crude oil prices and a record low proportion of the GST national allocation.

He said cuts to the health and education budget handed down in the federal budget on Tuesday would affect WA less than other states.

An extra $150m has been set aside for remote Aboriginal communities, in the form of a dedicated account taken from the Royalties for Regions fund.

Addressing the media in the budget lock-up, Redman, who is also the regional development minister, said the new fund would be used to tackle “the remote communities challenge”.

Specific projects will be determined by the remote community reform project, which the Barnett government announced last week.

Redman said $50m had already been put aside for the fund and another $100m would be added over the next two years.

The money will come from the state’s total pool of Royalties for Regions funding, which is set at 25% of the state’s total revenue hall, capped at $1bn a year.

A second special account has been set up to distribute the $90m in municipal and essential services funding handed over by the commonwealth in exchange for it relinquishing its responsibilities in WA’s remote Aboriginal communities in 2014. That change will take effect from 1 July.