I firmly believe that every family should have, as a bare minimum, a box where they keep old clean packets and cartons, a glue stick and some sticky tape.
I think in our house I may be getting a bit over the top however, since when Matt ordered cheese triangles for Ollie's lunchbox my first thought was 'oooh those packets would make good wheels'. The kids hated the cheese, but the round cardboard packaging it came in fired their imagination and is currently on it's way to becoming a paddling pool and sandpit for the 'Winnie the Witch' house they are making based on one of their favourite library books.
I keep any nice strong corrugated card packaging we get because it makes great bases for projects. I stick a small square of double sided tape on each side of the boxes we're using so that when the kids stack them up how they want them they don't all fall over straight away, but are easy to pull apart if they change their mind about where they want them. If the boxes are still a bit wobbly I give the boys strips of tape to stick the boxes together with more securely. Once they're happy with the overall design we cover the whole lot in paper mache made by mixing PVA glue half and half with water and using this mixture to paste on any thin paper we want to use, such as newspaper, crepe paper or paper napkins. This can then by painted or drawn on once it's dry, and other details such as feathers or sticks added.
Junk modelling is obviously a good creative activity, but it also introduces engineering ideas because children will start to observe practical considerations such as structures being more stable when the larger boxes are below the smaller ones, and lighter items could be crushed by heavier ones so it's best to put heavy things at the bottom. When we cut a toilet roll tube to make a peaked roof we found that we had to cross brace it with tape to prevent it trying to bulge back into a round shape.
There are also good opportunities for developing vocabulary "do you want to put that box on or under this box?" helps with spacial descriptive language and you can use all sorts of descriptive language by talking about sizes, shapes, colours and textures. By asking children where they want things and agreeing with their choices you are also building their self esteem. It's fine to suggest alternatives "do you think that would be less wobbly if you put it there instead" but remember it is their project. Even if you don't end up with a recognisable thing such as a car or a house, it doesn't matter because the point of the activity is the playing and learning, not the actual product. I find this bit tricky to keep in mind because deep down I want to take over and make a house that looks like a house, but too much interference in the design is telling the children that you don't value their ideas and that they are no good, which risks them losing interest and giving up.
Safety bit: make sure old packages are clean and dry, avoid glass and anything with sharp edges. Take care with scissors and small fingers and close attention is needed for under threes if you are building with anything that has small components such as bottle caps which could be a choking hazard. The same goes for your finished model - if there's small bits that can be pulled off you will need to be really vigilant when littlies are about.