How does the dust reduction for the distance from empire work?

If you colonize a system outside of your colored influence area you create an outpost which carries this penalty. After 30 turns without being blockaded, your outpost becomes a colony and therefore generates its own influence area thus removing the penalty and starts to get the expansion disapproval as Garm stated in the question comments.

As far as I know, if another Planets influence area covers your outpost it wont get this penalty and will instead instantly get the expansion disapproval.