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Parrots, by nature, are messy creatures. The constant litter of droppings, food, feathers, and shredded toys in and around the cage can be exasperating even for the owners of small parrots like budgies and cockatiels. Unfortunately, even though we wish that our birds would be more careful with their "trash," they have no instinct to keep their surroundings sanitary. In the wild they can afford to be messy, because once they drop something they rarely come near it again. It falls to the ground out of reach and is left behind for Mother Nature's cleanup crew when the flock moves on. This may be an effective disposal method in the wild, but certainly not in captivity. Our pet birds simply do not have the option to leave their messes far behind.
Since most waste falls to the bottom, the cage floor is almost always the first area of your bird's home to become contaminated, unsafe, and unsightly. In addition to being unattractive, a dirty cage floor can present a serious health risk for a budgie or cockatiel because accumulated droppings, food, and liquid provide a perfect breeding ground for bacteria and fungi. Dust from dried cage debris can spread disease to other birds and potentially irritate your lungs as well. Keeping the cage floor clean will help keep you and your bird healthy and the appearance of the cage much more attractive.
There are many materials that have been used as liners for the floors of bird cages to make cleaning easier. Each has its attributes, but many have downfalls that need to be considered before you use them in your bird's home. Some others should be avoided completely because they are too dangerous.
Loose beddings such as crushed corn cobs, crushed walnut shells, wood shavings, sand, and other similar materials may look nice, but looks can be deceiving. Because they are absorbent and deeply piled, they trap food, droppings, and moisture, allowing bacteria and fungi to grow out of control. Impaction of the digestive system is also a risk with these materials, especially if your bird is young, bored, sick, hungry, or just curious. Some birds will eat indigestible cage beddings until they completely block their digestive systems. This often leads to death, especially in the smaller birds where emergency surgery to remove the foreign material is next to impossible. The final downfall of using loose beddings as cage liners is that they disguise the appearance of your bird's droppings. A change in the appearance of her droppings is often the first noticeable indication that your bird is ill. When droppings fall on loose bedding materials you cannot accurately monitor their color and consistency. If you do choose to use one of these loose beddings, you must completely change it every day or two to keep bacterial and fungal levels in check. Use a wire grate placed at least an inch above the level of the bedding to keep your bird from ingesting it. Finally, make sure your bird produces droppings on a piece of paper several times per day so you can watch for any changes.
Paper cage liners, such as newspaper, wax paper, paper towels, and butcher paper, are usually a better choice than loose beddings for budgies and cockatiels. Besides being inexpensive, paper does not trap cage debris and allows you to observe your bird's droppings more carefully. It is very easy to cut a stack of paper to fit the bottom of the cage and then peel off the top layer(s) at least once every day, removing all wet and soiled sheets. You can also place the sheets in the cage one or two at a time instead of putting the whole stack in the cage at once. Both methods allow you to completely remove all waste material, leaving a clean, dry surface each day. There are still a few downfalls to consider when using paper, however. First, colored inks can be toxic. When using newspaper to line a cage, make sure that the sheets you use are not printed with colored inks unless you use a wire grate or you are positive that your bird does not shred paper or eat moist foods off the floor. Also, light colored birds, like pieds, lutinos, and albinos, can become a dirty grey from the black ink that rubs off of newspaper. You can avoid ink problems entirely by using non-printed papers such as plain newsprint, computer paper, butcher paper, wax paper, or paper towels. Look under "Paper Products" in your Yellow Pages for sources for specialty office and packaging papers. Some mail-order bird supply companies also carry these products. Your local newspaper may be able to sell you blank newsprint in sheets or rolls at a reduced cost. Shredding and ingestion can be another problem associated with using paper as a cage liner. Budgies and cockatiels in breeding condition often do this as a substitute for their natural nesting behavior of enlarging hollows in trees. Other birds seem to do it just for fun. If you notice that your bird is becoming a paper chewer, make sure that she is not actually eating the paper. If so, give her a lot of destructible toys and foods and use a wire grate suspended above the cage floor so she cannot reach the paper. If she is not actually eating the paper, switch to an ink-free paper or use a wire grate until this behavior ceases.
There are several cage liners that are inappropriate to use around birds. Kitty litter should not be used because it is often dusty and most brands contain chemical deodorizers that should not be ingested or inhaled. Some wood shavings designed for use with pet rodents or rabbits are treated with deodorizing chemicals as well, so use the plain variety. While they smell wonderful, cedar shavings should not be used as a bird cage liner because their aromatic oils can be irritating to your bird's respiratory system. "Sandpaper" cage liners can cause abrasions on your bird's feet or digestive system impaction if she eats too much grit.
The final cage liner option is no liner at all! You can remove the cage tray daily, wash, dry, and replace it. If you can find a second tray or a suitable substitute, you will always have a fresh tray ready when you remove the other one for cleaning. This method is labor-intensive, but probably the most sanitary and least risky of all of the options.

When choosing a cage liner, it is important to consider many issues: Cleanliness, safety, expense, convenience, your life-style, and your bird's individual needs. With a little thought and experimentation, you will be able to settle on the option that is perfect for you and your bird.