You should never use sawdust as it is way too dusty! I use woodshavings although some may not. Newspaper is fine on the bottom though with just hay on top.
I have used them for years and have never had any problems. You always have to remember to add plenty of hay as this adds insulation and also the piggies eat it, aiding their digestion.
In my cages/hutches their bedding is as follows;
A black bag lined at the bottom
newspaper
woodshavings - a small covering
hay
shredded paper.
I put the bag at the bottom as when it's time for them to be cleaned out, I only have to roll it all up and chuck it away!
xx Kelly xx