How do you erase the hard drive on iMac G5

You need to boot into the system install disks that came with the G5 and erase the drive from there. One can't erase a drive that's the active boot drive. Be sure to follow the instructions in this Apple document: What to do before you sell or give away your Mac - Apple Support. You'll need to log out of iTunes and iCloud before erasing the drive.

Or you can connect the G5 to another Mac via Target Disk Mode, Transferring files between two computers using Target Disk Mode, and delete the drive using your current Mac.

Drive Partition and Format Pre-El Capitan

1. Open Disk Utility in the Utilities' folder.
2. After Disk Utility loads select the drive (out-dented entry with the mfgr.'s ID and size) from the side list.
3. Click on the Partition tab in Disk Utility's main window toolbar.
4. Set the number of partitions to one (1) from the Partition Scheme drop-down menu.
5. Set the Format type to Mac OS Extended (Journaled.)
6. Click on the Apply button.
7. QuitDisk Utility after the process is completed.

You should have an option to eject the disk after erasing the drive from the disk. Or there's a small hole in the optical drive just next to the tray which will open the tray with a straightened paperclip that will let you remove the disc.

Since you're going to recycle the G5 there's no need to install the original system.