Pencils don't contain lead anymore, at least here in the US. The "lead" (it's still called that despite not having lead in it) is graphite mixed with clay, which I was told is supposed to be non-toxic? Granted I still don't let mine chew on them because I don't know what's in the paint or what type of wood.
I'm still giggling at the thought of a little budgie licking the words on a book. They totally crack me up! Never a dull moment with our little feathered friends!